Judge: Kimberly Knill, Case: 30-2022-01284293-CU-FR-CJC, Date: 2023-08-11 Tentative Ruling
Defendants’ Demurrer to First Amended Complaint
Defendants, Milan Real Estate Investments III, LP, Tivoli Capital, Inc. and Claus Dieckell’s (Defendants) Demurrer to the First Amended Complaint (Demurrer) is OVERRULED.
First Cause of Action: Intentional Misrepresentation/Intentional Nondisclosure
Defendants demur to the first cause of action on the grounds it fails to state a cause of action because the FAC does not allege duty, Defendants’ intent to induce reliance, or Plaintiff’s justifiable reliance.
A legal duty arises from a fiduciary or confidential relationship, privity of contract, or from special circumstances, oftentimes in cases dealing with the sale of property. (La Jolla VIII Homeowners’ Association v. Superior Court (1989) 212 Cal.App.3d 1131, 1151 (La Jolla III); see Calemine v. Samuelson (2009) 171 Cal.App.4th 153, 161 [real estate seller’s duty].) Plaintiffs allege duty at paragraph 12.
The elements of a fraud cause of action for damages based upon mere nondisclosure involving no fiduciary or confidential relationship are: (1) Nondisclosure by the defendant of facts materially affecting the value or desirability of the property; (2) Defendant's knowledge of such facts and of their being unknown to or beyond the reach of the plaintiff; (3) Defendant's intention to induce action by the plaintiff; (4) Inducement of the plaintiff to act by reason of the nondisclosure and (5) Resulting damages. (La Jolla III, supra, 212 Cal.App.3d at pp. 1151-1152.)
Plaintiff sufficiently alleges intent to induce reliance at paragraph 14, Plaintiff’s reliance at paragraph 15, and resulting damages at paragraph 25.
Second Cause of Action: Negligent Misrepresentation/Negligent Disclosure
Defendants demur to the second cause of action on the grounds it fails to state a cause of action because “negligent nondisclosure” is not a cause of action.
It appears the FAC, read as a whole, is alleging a cause of action for negligence. (See McDonald v. Filice (1967) 252 Cal.App.2d 613, 622 [nature and character of pleading determined from allegations regardless of what it may be called]; Quelimane Co. v. Stewart Guaranty Co. (1998) 19 Cal.4th 26, 38 [court gives complaint reasonable interpretation, reading it as a whole and its parts in their context].)
The elements of negligence are as follows: “(1) the defendant owed the plaintiff a duty of care, (2) the defendant breached that duty, and (3) the breach proximately caused the plaintiff's damages or injuries.” (Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 62.)
Plaintiff sufficiently alleges duty to disclose (paragraph 12), breach (paragraphs 21, 24 and 29) and Plaintiff’s resulting damages (paragraphs 25 and 30). This is sufficient.
Statute of Limitations
The statute of limitations is 3 years for the first cause of action (Code Civ. Proc., § section 338, subd. (d)) and 2 years for the second cause of action. (Id., § 339, subd. (1).) An exception to the time bar of the statute of limitations is the delayed discovery rule.
To avoid the time bar, Plaintiff must rely on the delayed-discovery rule, which postpones accrual of a cause of action until the plaintiff discovers, or has reason to discover, the cause of action. (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807.) Under the delayed discovery rule, the accrual date of a cause of action is delayed until plaintiff is aware of his or her injury and its cause. Plaintiff is charged with this awareness as of the date he or she suspects or should suspect the injury was caused by someone's wrongful act. The period of limitations will begin to run when plaintiff has a suspicion of wrongdoing; in other words, when he or she has notice of information of circumstances to put a reasonable person on inquiry. (Brandon G. v. Gray (2003) 111 Cal.App.4th 29, 35.)
Plaintiff alleges the parties entered into the agreement on May 11, 2015. However, paragraph 16 sufficiently alleges the application of the delayed discovery rule. It alleges Plaintiff could have not discovered the water seepage issue due to its originating below ground and that it was not readily apparent by a visual inspection.
Defendants to file an answer within 10 days.
Plaintiff to give notice.