Judge Kerry Bensinger, Case Number: 21STCV16429, Date: 2023-12-01 Tentative Ruling

This is a breach of contract case. According to the complaint, Plaintiff, Baha Tan Toksoz, reached out to Chris Furie (“Furie”), a real estate broker, for assistance in purchasing a property located at 943 N. Laurel Avenue in Los Angeles, California. Instead of assisting Plaintiff with the purchase of 943 N. Laurel Avenue, Furie proposed the purchase of 944 N. Laurel Avenue in Los Angeles, California (“Subject Property”). Furie represented that he and his company, 944 Laurel, LLC (“944 Laurel”), were in the process of purchasing the property from its owner, Alex Goodson (“Goodson”). On November 5, 2019, Plaintiff eventually entered into an oral lease agreement with Furie for the Subject Property. The oral agreement had an option to purchase.

Pursuant to the agreement, Furie directed Plaintiff to deposit $118,500 into escrow. The escrow deposit would be used by Defendants to purchase the Subject Property from Goodson. Furie assured Plaintiff that those funds would be returned if escrow did not close. Plaintiff was also directed to obtain insurance for the property and to provide proof of same to the escrow. However, in May of 2020, Furie notified Plaintiff that escrow had terminated and that Plaintiff’s deposit of $118,500 was forfeited as liquidated damages. Plaintiff did not know there was a liquidated damages clause, let alone agree to said clause, nor was he given notice that the escrow funds were in jeopardy. Plaintiff was further unaware that Furie and 944 Laurel were the previous owners of the Subject Property, that they had sold it to Goodson, that Goodson had filed a notice of recission for the Subject Property on April 1, 2018, and that Goodson initiated litigation against Furie and 944 N. Laurel over misrepresentations concerning the Subject Property. That litigation, filed on October 24, 2019 in Los Angeles Superior Court, Case No. 19STCV38262, was ongoing for nearly the entire duration of Plaintiff’s dealings with Furie. Plaintiff alleges that Furie never intended to sell the Subject Property to Plaintiff and used Plaintiff’s deposit of $118,500 to extract themselves out of the lawsuit with Goodson.

On April 30, 2021, Plaintiff filed a Complaint against Defendants, Furie and 944 Laurel, LLC. On August 30, 2021, Plaintiff filed the First Amended Complaint (FAC) alleging causes of action for (1) Breach of Contract, (2) Breach of Covenant of Good Faith and Fair Dealing, (3) Breach of Fiduciary Duty, (4) Violation of Bus. & Prof. Code § 17200, (5) Fraud, (6) Misrepresentation, (7) Negligence, (8) Conversion, and (9) Violation of Penal Code § 496.

On December 1, 2023, the court granted, in relevant part, Defendants’ motion for judgment on the pleadings to the Third Cause of Action for Breach of Fiduciary Duty in the FAC with leave to amend.

On December 15, 2023, Plaintiff timely filed the Second Amended Complaint (SAC). The SAC now asserts the Third Cause of Action for Breach of Fiduciary Duty against Furie only.

On January 16, 2024, Defendants filed this demurrer to the Third Cause of Action for Breach of Fiduciary Duty in the SAC.

A demurrer tests the legal sufficiency of the pleadings and will be sustained only where the pleading is defective on its face. (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 459.) “We treat the demurrer as admitting all material facts properly pleaded but not contentions, deductions or conclusions of fact or law. We accept the factual allegations of the complaint as true and also consider matters which may be judicially noticed. [Citation.]” (Mitchell v. California Department of Public Health (2016) 1 Cal.App.5th 1000, 1007; Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604 [“the facts alleged in the pleading are deemed to be true, however improbable they may be”].) Allegations are to be liberally construed. (Code Civ. Proc., § 452.) In construing the allegations, the court is to give effect to specific factual allegations that may modify or limit inconsistent general or conclusory allegations. (Financial Corporation of America v. Wilburn (1987) 189 Cal.App.3rd 764, 769.)

A demurrer may be brought if insufficient facts are stated to support the cause of action asserted. (Code Civ. Proc., § 430.10, subd. (e).) “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.)

Where the complaint contains substantial factual allegations sufficiently apprising defendant of the issues it is being asked to meet, a demurrer for uncertainty will be overruled or plaintiff will be given leave to amend. (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2.) Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the complainant to show the Court that a pleading can be amended successfully. (Ibid.)

“The elements of a cause of action for breach of fiduciary duty are the existence of a

fiduciary relationship, its breach, and damage proximately caused by that breach.” (Knox v. Dean (2012) 205 Cal.App.4th 417, 432-33.) No fraudulent intent is required. (See Civ. Code, § 1573 (defining “constructive fraud”).)

Defendants argue the SAC still does not adequately allege the existence of a fiduciary relationship between Furie and Plaintiff. A review of the SAC demonstrates otherwise. The SAC adds the allegation that after Furie informed Plaintiff that he didn’t qualify for 943 N. Laurel Ave., Furie suggested Plaintiff consider purchasing the Subject Property: “At this point since Defendant Furie was no longer seeking to obtain a loan for Plaintiff who was very interested in obtaining the other property located at 944 N. Laurel, Plaintiff informed Defendant Furie he had a friend who is a licensed real estate agent and could assist Plaintiff with the transaction. Furie informed Plaintiff getting his friend involved was not necessary since Defendant Furie himself was also a licensed Real Estate Broker. By taking this action, Defendant Furie transitioned from his role as a mortgage broker to that of real estate broker Plaintiff.” (SAC, ¶¶ 20, 72.) As alleged, the reasonable inference to be drawn is that Furie was acting as the seller and real estate broker for the purchase of the Subject Property by dispelling Plaintiff’s need to engage his friend to serve as a real estate agent. This allegation overcomes Defendants’ argument that the allegations merely portray Defendants as the seller, and Plaintiff as the buyer, of the Subject Property. This inference is further buttressed by the allegations showing the course of dealings between Furie and Plaintiff. Prior to the transaction involving the Subject Property, Plaintiff used Furie in his capacity as a real estate professional in 2016. (SAC, ¶ 17.) The relationship between Plaintiff and Furie is professional in nature. Plaintiff adequately alleges that Furie was acting as Plaintiff’s real estate broker in connection to the purchase of the Subject Property. Furie therefore had a fiduciary duty to disclose the pending litigation between Furie and Goodson regarding the Subject Property.

Defendants are ordered to serve and file their Answer to the Second Amended Complaint within 20 days.

Kerry Bensinger

Judge of the Superior Court