Judge Kerry Bensinger, Case Number: 23STCV21038, Date: 2024-03-01 Tentative Ruling

This is a breach of oral contract and partition action for real property commonly known as 10350 Samoa Avenue, Tujunga, CA 91042 (the “Samoa Property”). On November 9, 2023, Plaintiff, Celeste M. Mulrooney, filed the operative First Amended Complaint (FAC) against Defendant Susan Florence Scalzo for (1) Partition, (2) Breach of Contract, (3) Fraud, (4) Common Counts, and (5) Declaratory Relief. The FAC is verified.

The FAC alleges as follows: Plaintiff and Defendant are sisters. In July 2011, the parties entered into an oral agreement to jointly purchase the Samoa Property. Defendant qualified for a lower interest rate on the mortgage if Plaintiff was not included on title or mortgage. As such, the parties mutually agreed that only Defendant’s name would be on the deed of title to the Samoa Property and on the mortgage. The parties also mutually agreed that they were co-owners of the Samoa Property and agreed to pay jointly for the maintenance of the property. Plaintiff paid 50% of the mortgage payment and property taxes, made improvements to the Samoa Property, among other things.

In December 2012, the parties’ sister, Ann Maria Spencer, came to live with the parties. On October 27, 2022, Defendant no longer wanted Ann to live with the parties and asked Ann to leave. Plaintiff protested Defendant’s treatment of Ann. Soon after, on November 15, 2022, Defendant informed Plaintiff she was terminating the parties’ ownership agreement and Plaintiff would have to vacate the premises. Plaintiff and Ann vacated the Samoa Property on March 25, 2023.

Plaintiff made equal payments on the property’s purchase and expenses for eleven and one-half years.

On December 11, 2023, Defendant filed this demurrer to each cause of action in the FAC.

The demurrer was heard on January 25, 2024. The court issued a tentative ruling overruling the demurrer as to the First, Second, Third, and Fourth Causes of Action, and sustaining as to the Fifth Cause of Action. Based on oral argument, the court did not adopt the tentative ruling and directed the parties to submit further briefing to address cases regarding equity, partial performance, and exclusive possession.

For the reasons stated herein, the court adopts its tentative ruling from January 25, 2024 as the final order of the court.

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.3d 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.)

Defense counsel has not complied with the meet and confer requirement. Defense counsel did not meet and confer with opposing counsel in person or by telephone. (See Declaration of Richard Kolber, ¶ 3; Code Civ. Proc., § 430.41, subd. (a).) Notwithstanding this defect, the court exercises its discretion to consider the demurrer. “A determination by the court that the meet and confer process was insufficient shall not be grounds to overrule or sustain a demurrer.” (Code Civ. Proc., § 430.41, subd. (a)(4).)

Defendant demurs to each cause of action for failure to state facts sufficient to constitute a cause of action.

As a threshold issue, although Defendant indicates in the Notice of Motion that she demurs to each cause of action, Defendant does not present any argument in the memorandum of points and authorities on the Fourth Cause of Action for Common Counts. “The court may construe the absence of a memorandum as an admission that the motion, or special demurrer is not meritorious and cause for its denial, and in the case of a demurrer, as a waiver of all grounds not supported.” (Cal. Rules of Court, rule 3.1113(a).) Accordingly, the demurrer to the Fourth Cause of Action is OVERRULED.

Because the First Cause of Action for Partition turns on whether Plaintiff states a claim for breach of contract, the court addresses first the demurrer to the breach of contract claim.

The elements of a breach of contract cause of action are: (1) the existence of a valid contract between the plaintiff and the defendant, (2) the plaintiff’s performance, (3) the defendant’s unjustified failure to perform, and (4) damages to the plaintiff caused by the defendant’s breach. (CACI No. 303; Careau & Co. v. Security Pacific Business, Inc. (1990) 222 Cal.App.3d 1371, 1388 (Careau); Otworth v. Southern Pac. Transportation (1985) 166 Cal.App.3d 452, 458.) “[T]he complaint must indicate on its face whether the contract is written, oral, or implied by conduct.” (Otworth, 166 Cal.App.3d at pp. 458-459.) The elements of a breach of oral contract claim are the same as those for a breach of written contract. (Careau, 222 Cal.App.3d at p. 1388.)

Defendant argues the Second Cause of Action is barred by the Statute of Frauds for three reasons: (1) the alleged breach concerns an oral agreement for an interest in real property; (2) no memorandum exists to take the agreement outside the Statute of Frauds; and (3) the partial performance exception to the Statute of Frauds does not apply.

The applicable portion of the Statute of Frauds is codified by Civil Code section 1624, subdivision (a)(3): “The following contracts are invalid, unless they, or some note or memorandum thereof, are in writing and subscribed by the party to be charged or by his agent: (3) An agreement for the leasing for a longer period than one year, or for the sale of real property, or of an interest therein; such an agreement, if made by an agent of the party sought to be charged, is invalid, unless the authority of the agent is in writing, subscribed by the party sought to be charged.” (Emphasis added.)

There is no dispute the alleged agreement at issue was oral and concerns an interest in real property. (See FAC, ¶ 44.) Plaintiff resists the demurrer on the grounds there is an alleged memorandum evidencing the parties’ agreement. Plaintiff also argues she partially performed taking the oral agreement outside the Statute of Frauds.

Plaintiff’s first argument is unconvincing. It relies on the allegation concerning the creation of the Susan Scalzo Trust. The FAC alleges the “Susan Scalzo Trust is an additional writing that documents the parties’ agreement to jointly own the Samoa property.” (FAC, ¶ 26.) This allegation is conclusory. Rather, the FAC makes clear the parties agreed to establish the trust and transfer the Samoa Property into the trust so that Plaintiff’s son would be the sole beneficiary of the property upon the parties’ deaths. (Id.) As alleged, the Susan Scalzo Trust was established to resolve an inheritance issue.

Notwithstanding the absence of a memorandum, the court finds partial performance is adequately pleaded.

“The doctrine of part performance by the purchaser is a well recognized exception to the statute of frauds as applied to contracts for the sale or lease of real property. [Citation.] Under the doctrine of part performance, the oral agreement for the transfer of an interest in real property is enforced when the buyer has taken possession of the property and either makes a full or partial payment of the purchase price, or makes valuable and substantial improvements on the property, in reliance on the oral agreement. [Citation.]” (Sutton v. Warner (1993) 12 Cal.App.4th 415, 422 [cleaned up].)

Here, the FAC alleges that, in reliance on the oral agreement, Plaintiff took joint possession of the property with Defendant (FAC, ¶ 32), made equal payments to the mortgage and property tax (FAC, ¶¶ 8, 9 , 34), and made improvements on the property (FAC, ¶¶ 13, 32, 34).

Defendant contends the allegations do not constitute part performance because payment of money alone does not constitute sufficient part performance. While this is technically correct (see Anderson v. Stansbury (1952) 38 Cal.2d 707, 716), the FAC plainly alleges that Plaintiff took possession, made payments on the property, and made improvements.

Defendant next contends that part performance requires exclusive possession of the property. The FAC alleges Plaintiff shared possession of the Samoa Property with Defendant and the parties’ sister. Defendant cites Viau v. Viau (1922) 57 Cal.App.66 for the proposition that exclusive possession is required to establish part performance. Defendant mischaracterizes Viau. In Viau, the defendant, plaintiff’s mother, orally promised plaintiff that if he remained with her and assisted in managing, planting, and improving her property, she would give him 20 acres of the property. The defendant repudiated the agreement. The court found plaintiff had not established partial performance because he never possessed the 20 acres. (Viau, at pp. 67, 68, 71.) Here, Plaintiff lived at the Samoa Property for over eleven years.[2] The FAC sufficiently pleads part performance as an exception to the Statute of Frauds.[3] The oral agreement is not barred.

In her supplement briefing, Defendant draws the court’s attention to Sutton v. Warner. In Sutton, possession is defined as follows: “Possession must be more than a ‘mere technical possession, not open to observation of the neighborhood, and capable of being proved only by select and confidential witnesses . . ..’ It must be actual, visible, notorious and exclusive, so that it manifests clearly that the buyer is claiming and asserting a distinctive ownership of the property inconsistent with the right of possession or ownership in any other person.” (Sutton, at pp. 422-423.) From this, Defendant extrapolates that a plaintiff claiming part performance of an oral contract to real property must possess exclusively the property in question. However, nowhere in Sutton does the Court of Appeal make such a finding.

Nor would such a ruling make sense in the context of co-ownership. For example, in this case, Plaintiff is not arguing she has exclusive ownership of the property. She argues she has a fifty percent interest. Hence, the other fifty percent owner is entitled to possession of the property as well. Defendant’s fifty percent does not divest Plaintiff of her fifty percent because they both lived at the property together. In Francis v. Golendich (1961) 193 Cal.App.2d 128, 131-132, a mother and son lived together on the property until the son was killed in combat. Thereafter the mother continued to live on the property. The mother’s “possession and that of her son before her under the oral contract of sale was sufficient part performance to take the contract out of the statute of frauds.” The fact the mother lived on the property with her son before he died did not divest her of ownership because she did not have exclusive possession of the property.

Over a hundred years ago, the California Supreme Court in Hambey v. Wise (1919) 181 Cal. 286, 289, discussed the contours of the “part performance of the contract as to take it out of the operation of the statute” of frauds. The High Court’s ruling offers guidance on the meaning of the phrase “actual, visible, notorious, and exclusive.” Hambey entered into an oral agreement to purchase land owned by Wise. At the time of the agreement, the land was actually possessed by a tenant named Wood. Hambey knew of Wood and knew that Wood possessed the subject property. After Hambey and Wise entered the oral agreement, Hambey told Wood he was now the owner of the property and falsely claimed to have a deed of title. Hambey and Wood then entered into a written agreement wherein Wood would continue to lease the property from Hambey. Wood later learned the agreement between Hambey and Wise was an oral agreement. With that knowledge, Wood convinced Wise to sell the property to Wood for a greater amount. Wood then obtained and recorded the deed of title. Despite recordation of the deed, Hambey demanded that Wise convey the land pursuant to the oral agreement. Wise refused. Hambey then sued Wise and Wood for specific performance of the oral agreement. At trial, the court found Hambey could not prove his oral agreement based on part performance because Hambey never took actual possession of the property. The California Supreme Court affirmed.

It only remains to consider whether or not the nature of Hambey's possession was such as to satisfy the requirement of the statute. In considering this question, it is not to be forgotten that equity is after all bound by the statute of frauds and that in general relief is given against the statute only in two classes of cases, first, where to allow the statute to be set up would be to secure to the party relying upon it the fruits of actual fraud, and, second, where to allow the statute to be set up would place the party resisting it in an inequitable position, it appearing further that there is evidence just as good as a writing of the agreement between the parties. (Fry on Specific Performance, 5th ed., secs. 584, 585.) In the absence of actual fraud, the question here presented is whether or not Hambey's possession of the land at any time before the conveyance to Wood was such as to place him in an inequitable position if precluded from proving his oral contract and whether or not it was also such as to furnish evidence just as good as a writing of the agreement between

The inequitable situation which is contemplated by the cases holding that the vendee's possession will suffice to take a contract for the sale of land out of the statute of frauds is the vendee's liability to an action for trespass if he is not allowed to prove his oral contract. The evidence just as good as a writing contemplated by those cases is the visibility and notoriety of an actual possession manifesting clearly and unequivocally a new and distinctive ownership. [Citation.] This Court, in Davis v. Judson, 159 Cal. 121, 132, [113 Pac. 147, 152], expressly holding that a nominal or merely technical possession was not sufficient, laid down the rule that the possession which must be taken in order to meet the equitable requirement of part performance, and warrant specific performance of the contract, is actual possession by the vendee. The ground upon which possession, as constituting part performance and authorizing specific performance, is supported, is that the vendee would be exposed to liability as a trespasser, if he could not invoke the protection of the contract.

Using the litmus test set out in Hambey to discern sufficiency of possession – that being the trespasser test – Plaintiff prevails. Without an ownership interest, Plaintiff would be a trespasser. In other words, actual, visible, notorious possession is the key inquiry. Here, Plaintiff alleges actual possession which was open, notorious, and continuous for over eleven (11) years. (FAC, ¶ 28.) Plaintiff’s possession was concurrent with Defendant’s co-ownership of the property. Defendant does not offer any authority that joint possession operates to defeat the doctrine of part performance.

“Partition is a statutory action.” (Jacquemart v. Jacquemart (1956) 142 Cal.App.2d 794, 796.) As is relevant here, “[a] partition action may be commenced and maintained by any of the following persons: (1) A coowner of personal property; (2) An owner of an estate of inheritance, an estate for life, or an estate for years in real property where such property or estate therein is owned by several persons concurrently or in successive estates.” (Code Civ. Proc., § 872.010, subd. (a).)

Defendant argues the First Cause of Action fails because she has no current interest in the property and thus lacks standing to seek partition. Defendant further argues the claim is barred by the Statute of Frauds because it is based on an invalid oral agreement.

Both arguments fail. The FAC alleges Plaintiff had a life estate[5] in the Samoa Property. Plaintiff has standing to seek partition. (FAC, ¶¶ 32-34.) As discussed above, the court considered and rejected Defendant’s Statute of Frauds challenge because the FAC sufficiently alleges part performance.

Defendant argues that a life estate can only be transferred by writing and cites Lewis v. Brown (1913) 22 Cal.App.38 in support. Lewis states, in relevant part, that “oral testimony cannot be considered as against the written terms of a deed for the purpose of limiting or qualifying the estate thereby granted or created.” (Lewis, at p. 43.) However, in Lewis, the Court of Appeal did not consider whether part performance created an exception to the written terms of a deed. Here, Plaintiff alleges she relied on the oral agreement and partly performed thereon. This accords with case law preceding and following Lewis. (See, e.g., Husheon v. Kelley (1912) 162 Cal. 656, 662 [“An executed written conveyance of real estate, in consideration of the promise by the grantee to perform services, cannot be set aside by the grantor on the ground that the obligation of the grantee is not the subject of specific performance. [Citation.] Where the conveyance is oral, instead of written, the case is not different, if there has been such part performance as to take the case out of the operation of section 1971 of the Code of Civil Procedure.”]; Halloran v. Isaacson (1949) 95 Cal.App.2d 357, 367 [agreeing with appellant that Bekins v. Smith (1918) 37 Cal.App. 222 is “authority for the statement that an oral transfer of an estate in land may be made effectual by taking possession of and performance by the grantee of acts in reliance on the grant.”].)

The elements of promissory fraud are: 1) a promise made regarding a material fact; 2)¿promisor’s lack of any intention of performing at the time of making the promise, based upon: a)¿specific factual circumstances beyond contract breach; or b) inferring a contemporaneous intent not to perform; 3) the promise was made with an intent to induce action by plaintiff; 4) plaintiff reasonably relied on the promise; 5) defendant did not perform the promised act; 6) plaintiff was injured/harmed; and 7) plaintiff’s reliance on defendant’s promise was a substantial factor in causing the harm. (CACI No. 1902.) ¿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 [explaining the rule of particularity in pleading is specific to fraud and “is required to enable the court to determine, on the basis of the pleadings alone, whether a foundation existed for the charge ...”].)

Defendant argues the Third Cause of Action fails because the FAC does not identify any promise Defendant made to Plaintiff. In support, Defendant focuses on the allegations set forth in paragraph 52 of the FAC, which do not identify any promises made. However, Defendant unduly focuses on paragraph 52. The FAC does allege specific promises Defendant made to Plaintiff which, as Plaintiff contends, were false at the time they were made. Those allegations include Defendant’s continued assurance that the parties were co-owners and intended to live the rest of their lives at the Samoa Property (FAC, ¶ 34) and Defendant giving Plaintiff a life estate in the property (FAC, ¶ 32). The Fourth Cause of Action is adequately pled.

“To qualify for declaratory relief, a party would have to demonstrate its action presented two essential elements: (1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the party’s rights or obligations.” (Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 909, quotation marks and brackets omitted.)¿

A cause of action for declaratory relief should not be used as a duplicate cause of action for the determination of identical issues raised in another cause of action. (General of America Insurance Co. v. Lilly (1968) 258 Cal.App.2d 465, 470.)¿¿Further, “there is no basis for declaratory relief where only past wrongs are involved.”¿ (Osseous Technologies of America, Inc. v. DiscoveryOrtho Partners LLC (2010) 191 Cal.App.4th 357, 366, quotation marks omitted.)¿

Here, Plaintiff’s declaratory relief claim is duplicative of her partition and breach of contract claims. Further, it involves the past wrong of repudiation of the alleged oral agreement. As such, the Fifth Cause of Action is deficient.[6] The demurrer to the Fifth Cause of Action is SUSTAINED.

The demurrer to the First, Second, Third and Fourth Causes of Action is overruled.

The demurrer to the Fifth Cause of Action is sustained. Leave to amend is denied.

Defendant is ordered to file and serve her Answer to the FAC within 10 days of this order.

[1] Despite the court’s clear instructions, Defendant provided supplemental briefing on Plaintiff’s Third Cause of Action for False Promises. The parties were not granted leave to address this claim. As such, the court disregards Defendant’s supplemental briefing as to the Third Cause of Action.

[2] Defendant cites three additional cases in her Reply in support of the proposition that part performance requires exclusive possession. Defendant mischaracterizes two of the cases—Robison v. Hanley (1955) 136 Cal.App.2d 820 and Prince v. Varona (1956) 144 Cal.App.2d 673. Neither case involved a plaintiff taking exclusive possession of property. Indeed, the nature of the plaintiff’s possession in Robison and Prince, respectively, is not discussed. The third case, Sutton v. Warner (1993) 12 Cal.App.4th 415, involved tenants who rented a house from Warner, plaintiffs’ landlord. The parties later entered into an oral agreement that provided the Suttons with the option to purchase the home. The issue in Sutton was not exclusive possession of the property but rathe whether the plaintiffs’ continued possession precluded part performance.

[3] Defendant also argues the “facts alleged do not unequivocally relate to an alleged oral ownership agreement and are more reasonably seen as rent or an expense-sharing agreement siblings.” (Mot., p.7:4-5.) In support, Defendant cites American Casualty Co. v. Curran Productions, Inc. (1963) 212 Cal.App.2d 386 (American Casualty). American Casualty is inapplicable here. American Casualty arose from the granting of a summary judgment. Defendant’s argument ignores the well-settled rules of liberal construction of pleadings in favor of the non-demurring party.

[4] Given the court’s ruling re: part performance, the court does not address Plaintiff’s equitable arguments.

[5] “A life estate is an estate whose duration is limited to the life of the person holding it or of some other person.”

(Peterson v. Wells Fargo Bank, N.A. (2015) 236 Cal.App.4th 844, 850–51, citing Estate of Smythe (1955 132 Cal.App.2d 343, 345-346.)

[6] Plaintiff requests judicial notice of an alleged on-going contractual relationship between the parties. The request is not in proper form nor is it relevant to the court’s ruling.