Judge: Joseph Lipner, Case: 23STCV25898, Date: 2024-05-02 Tentative Ruling
Case Number: 23STCV25898 Hearing Date: May 2, 2024 Dept: 72
SUPERIOR COURT OF CALIFORNIA
COUNTY OF LOS ANGELES
DEPARTMENT 72
TENTATIVE
RULING
|
MORGAN BOTTEHSAZAN, Plaintiff, v. RAMIN ZAKARYA, et al., Defendants. |
Case No:
23STCV25898 Hearing Date: May 2, 2024 Calendar Number: 5 |
Defendants Ramin Zakarya (“Fred” [the Court uses first names
only for clarity, and means no disrespect]), Elizabeth Zakarya (“Elizabeth”),
Fred Yazdanpanah, and Empire State Commercial Properties Corp. (“Empire”)
(collectively, (“Defendants”) move for judgment on the pleadings as to the Complaint
filed by Plaintiff Morgan Bottehsazan (“Plaintiff”).
The Court DENIES the motion as to the first and fourth
claims.
The Court GRANTS the motion WITH LEAVE TO AMEND as to the
second, third, and fifth claims.
This case relates to a real estate transaction. The
following facts are taken from the allegations of the Complaint, which the
Court accepts as true for the purposes of this motion.
In 2016, Plaintiff was procuring a purchaser for the real
property located at 218-220 East 27th Street, New York, New York (the
“Property”). Plaintiff and Defendants reached a deal to co-broker and sell the
premises. The parties, negotiating in California, reached an oral agreement
that the fee or commission to be received from any purchaser would be 6 percent
of the purchase price. The parties agreed that Plaintiff would receive one half
of the proceeds and Defendants would receive the other half.
A purchaser was found, and a closing took place on the
Property. The purchaser agreed to pay the requested permission of 6 percent. At
closing, the purchaser paid a price of $13,100,000.00 for the Property.
However, the purchaser refused to pay the full commission to the parties, which
would have totaled $786,000.00, and instead placed only $100,000.00 in escrow.
Litigation ensued in the New York Supreme Court for the
payment of the entire commission (the “New York Action”). Plaintiff drafted and
authored the complaint in the New York Action. In the New York Action, Ramin
and Yazdanpanah testified under oath that the Defendants had entered into an
oral agreement with Plaintiff to share the commission with Plaintiff, with
Plaintiff receiving one half and Defendants collectively receiving the other
half.
During the course of the New York Action, Yazdanpanah testified
under oath that he had received a sum of $25,000.00 from the purchases as
commission. Plaintiff was never notified of this payment.
In May 2023, Defendants reached a settlement with the
purchasers without Plaintiff’s knowledge, agreeing to receive a reduced
commission. Plaintiff alleges that Defendants intentionally concealed this
information from Plaintiff and received all of the settlement funds, including
the $25,000.00 previously paid to Yazdanpanah, without Plaintiff’s knowledge or
consent.
Plaintiff filed this action on October 23, 2023, raising
claims for (1) breach of contract; (2) fraudulent misrepresentation; (3)
negligent misrepresentation; (4) breach of the implied covenant of good faith
and fair dealing; and (5) breach of fiduciary duty.
On February 8, 2024, each Defendant filed a separate answer.
On April 9, 2024, Defendants moved for judgment on the
pleadings. Plaintiff filed an opposition. Defendants did not file a reply.
Either prior to trial, but after the time to answer or demur
has passed, or at the trial, the plaintiff or the defendant may move for
judgment on the pleadings and that the appropriate ground for such a motion is
the same as that arguable by general demurrer, namely, the failure to state a
cause of action or defense. (Dobbins v. Hardister (1966) 242 Cal.App.2d
787, 791; See also Sofias v. Bank of America (1985) 172 Cal.App.3d 583,
586 [The non-statutory motion for judgment on the pleadings can be made at any
time, even during trial, since the grounds for a general demurrer are never
waived.], see also Code Civ. Proc., §438(f).)
A motion for judgment on the pleadings performs the same
function as a general demurrer, and hence attacks only defects disclosed on the
face of the pleadings or by matters that can be judicially noticed. (See, e.g.,
Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (TRG 1998)
§§ 7:275, 7:322; Lance Camper Manufacturing Corp. v. Republic Indemnity Co.
(1996) 44 Cal.App.4th 194, 198.) Presentation of extrinsic evidence is
therefore not proper on a motion for judgment on the pleadings. (Id.; Cloud
v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 999.) Both a demurrer
and a motion for judgment on the pleadings accept as true all material factual
allegations of the challenged pleading, unless contrary to law or to facts of
which a court may take judicial notice. (Mechanical Contractors Assn. v.
Greater Bay Area Assn. (1998) 66 Cal.App.4th 672, 677; Edwards v. Centex
Real Estate Corp, (1997) 53 Cal.App.4th 15, 27.)
The motion may be made only after one of the following
conditions has occurred: (1) If the moving party is a plaintiff, and the
defendant has already filed his or her answer to the complaint and the time for
the plaintiff to demur to the answer has expired; (2) If the moving party is a
defendant, and the defendant has already filed his or her answer to the
complaint and the time for the defendant to demur to the complaint has expired.
(Code Civ. Proc., § 438(f).) The motion provided for in Code of Civil Procedure
section 438 may be made even though either of the following conditions
exist: (1) The moving party has already demurred to the complaint or
answer, as the case may be, on the same grounds as is the basis for the motion
provided for in this section and the demurrer has been overruled, provided that
there has been a material change in applicable case law or statute since the
ruling on the demurrer; (2) The moving party did not demur to the complaint or
answer, as the case may be, on the same grounds as is the basis for the motion
provided for in this section. (Code Civ. Proc., § 438(g).) No motion may be
made pursuant to Code of Civil Procedure section 438 if a pretrial conference
order has been entered pursuant to Code of Civil Procedure section 575, or
within 30 days of the date the action is initially set for trial, whichever is
later, unless the court otherwise permits. (Code Civ. Proc., § 438(e).)
Defendants argue that the Court does not have personal
jurisdiction over them.
“[A] party who seeks relief on any basis other than a motion
to quash for lack of personal jurisdiction will be deemed to have made a
general appearance and waived all objections to defects in service, process, or
personal jurisdiction.” (Dial 800 v.
Fesbinder (2004) 118 Cal. App. 4th 32, 52.)
Defendants have all filed answers in this case. Defendants
have therefore waived all objections to personal jurisdiction.
Defendants argue that this action should be dismissed on the
basis of the forum non conveniens doctrine.
“A motion to stay or dismiss on the ground of inconvenient
forum must be made within the time permitted to plead, i.e., 30 days after
service of the complaint, unless extended by stipulation or court order. (Olinick
v. BMG Entertainment (2006) 138 Cal.App.4th 1286, 1295, citing Code Civ.
Proc. 418.10.)
The time to challenge the convenience of the forum has long
lapsed – in fact, more than 30 days have passed since Defendants filed their answers.
Forum non conveniens is therefore not a valid basis to dismiss this action.
“A general demurrer may be interposed when the complaint
shows on its face that the agreement sued on is within the statute of frauds
and does not comply with its requirements.”
(Parker v. Solomon (1959) 171 Cal.App.2d 125, 136.)
In relevant part, the statute of frauds applies to
agreements “authorizing or employing an agent, broker, or any other person to
purchase or sell real estate, or to lease real estate for a longer period than
one year, or to procure, introduce, or find a purchaser or seller of real
estate or a lessee or lessor of real estate where the lease is for a longer
period than one year, for compensation or a commission.” (Civ. Code, § 1624,
subd. (a)(4).)
Section 1624(a)(4) appears to contemplate transactions
between the seller of the property and an agent to bind the seller to a sale.
It “does not extend to agreements between brokers to cooperate in making sales
for the sake of the commission or profits and that this substantially was such
a case.” (Pacific Southwest Development Corp. v. Western Pac. R. Co.
(1956) 47 Cal.2d 62, 67.) Where a case concerns “an agreement between two
brokers to divide equally a commission to be paid upon the sale of the land”, the
statute of frauds does not apply. (Id. at pp. 66-67.)
This is such a case – Plaintiff does not allege that she
owned the Property, but rather that she and Defendants entered into an
agreement to procure a buyer for the property and split the commission. The
statute of frauds therefore does not apply.
If a breach of contract claim “is based on alleged breach of
a written contract, the terms must be set out verbatim in the body of the
complaint or a copy of the written agreement must be attached and incorporated
by reference.” (Harris v. Rudin, Richman
& Appel (1999) 74 Cal.App.4th 299, 307.) In some circumstances, a
plaintiff may also “plead the legal effect of the contract rather than its
precise language.” (Construction
Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189,
198-199.)
Because Plaintiff’s claim is based on an oral contract,
Plaintiff does not need to attach a copy of the contract or set out its terms
verbatim.
Plaintiff has adequately alleged that she entered a contract
with Defendants to find a buyer for the Property. Plaintiff has alleged the key
terms relating to the division of the commission. Plaintiff has alleged her
performance. Plaintiff has alleged that Defendants breached the contract by
withholding money paid for the commission without Plaintiff’s knowledge or
consent.
Defendants argue that their declarations show that they
never entered into a contract with Plaintiff. Extrinsic evidence may not be
considered on a motion for judgment on the pleadings, and the Court will not do
so here. (Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 999.)
The Court therefore denies the motion with respect to this
claim.
“The elements of fraud are (a) a misrepresentation (false
representation, concealment, or nondisclosure); (b) scienter or knowledge of
its falsity; (c) intent to induce reliance; (d) justifiable reliance; and (e)
resulting damage.” (Hinesley v. Oakshade
Town Ctr. (2005) 135 Cal.App.4th 289, 294.)
The facts constituting the alleged fraud must be alleged
factually and specifically as to every element of fraud, as the policy of
“liberal construction” of the pleadings will not ordinarily be invoked. (Lazar v. Superior Court (1996) 12
Cal.4th 631, 645.) To properly allege fraud against a corporation, the
plaintiffs must plead the names of the persons allegedly making the false
representations, their authority to speak, to whom they spoke, what they said
or wrote, and when it was said or written. (Tarmann
v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.)
Defendants argue that Plaintiff has not pled her fraud
claims with adequate specificity. Here, Plaintiff’s allegations as to what
representations Defendants made are relatively conclusory. Plaintiff alleges
that Defendants said that they would split the commission with Plaintiff, but
not who said what.
The Court therefore grants the motion as to this claim with
leave to amend.
The elements of a cause of action for negligent
misrepresentation include “[m]isrepresentation of a past or existing material
fact, without reasonable ground for believing it to be true, and with intent to
induce another’s reliance on the fact misrepresented; ignorance of the truth
and justifiable reliance on the misrepresentation by the party to whom it was
directed; and resulting damage.” (Hydro-Mill
Co., Inc. v. Hayward, Tilton & Rolapp Ins. Associates, Inc. (2004) 115
Cal.App.4th 1145, 1154, quotation marks omitted.) The facts constituting the
alleged fraud must be alleged factually and specifically as to every element of
fraud, as the policy of “liberal construction” of the pleadings will not
ordinarily be invoked. (Lazar v. Superior
Court (1996) 12 Cal.4th 631, 645.) To properly allege fraud against a
corporation, the plaintiff must plead the names of the persons allegedly making
the false representations, their authority to speak, to whom they spoke, what
they said or wrote, and when it was said or written. (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153,
157.)
As discussed above, Plaintiff’s allegations as to what
representations Defendants made are relatively conclusory. Plaintiff alleges
that Defendants said that they would split the commission with Plaintiff, but
not who said what.
The Court therefore grants the motion as to this claim with
leave to amend.
“A breach of the implied covenant of good faith and fair
dealing involves something beyond breach of the contractual duty itself and it
has been held that bad faith implies unfair dealing rather than mistaken
judgment.” (Careau & Co. v. Security
Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1394.) “If the
allegations do not go beyond the statement of a mere contract breach and,
relying on the same alleged acts, simply seek the same damages or other relief
already claimed in a companion contract cause of action, they may be
disregarded as superfluous as no additional claim is actually stated … [T]he
only justification for asserting a separate cause of action for breach of the
implied covenant is to obtain a tort recovery.” (Id. at pp. 1394-1395.) To recover in tort for breach of the implied
covenant, the defendant must “have acted unreasonably or without proper cause.”
(Id. at p. 1395 [citations and
italics omitted].)
Defendants argue that Plaintiff fails to provide additional
facts compared to her breach of contract claim, and that this cause of action
is therefore duplicative of that claim. The Court disagrees. Plaintiff has pled
that Defendants wrongfully concealed multiple commission payments that the
purchasers made to Defendants so that Plaintiff would not obtain the money.
This conduct rises above a mere breach of contract and states a claim for
breach of the covenant of good faith and fair dealing.
The Court therefore denies the motion as to this claim.
Defendants argue that no fiduciary relationship existed
between Plaintiff and Defendants. Plaintiff alleges that Defendants undertook
to act for the benefit of Plaintiff and agreed to collect a share of the
commission from the sale of the Property. The contract in question appears to
be a contract for Plaintiff and Defendants to act as co-brokers on
behalf of a third-party seller – and, in fact, Plaintiff argues as such.
(Opposition at p. 6:18-22.) This has the appearance of an ordinary business
agreement, and not a fiduciary relationship.
The Court grants the motion with leave to amend as to this
claim.