Judge: Lee W. Tsao, Case: 23NWCV02126, Date: 2024-02-08 Tentative Ruling

Case Number: 23NWCV02126    Hearing Date: February 8, 2024    Dept: C

TAPIA v. KIM

CASE NO.:  23NWCV02126

HEARING:  02/08/24

#5

Defendants HOPE Y. KIM and PARTNERS OF BUILDING CAPITAL, INC.’s Demurrer to Plaintiffs’ Complaint is SUSTAINED with 30 days leave to amend.

Moving Party to give Notice.

This action for breach of contract was filed by Plaintiffs WENCESLADO TAPIA and ERIK TAPIA (collectively “Plaintiffs”) on July 10, 2023.

Plaintiffs allege that “[o]n or about September 2022 Plaintiff Wenceslado and his nephew Plaintiff Erik were looking to purchase an investment property…. It was agreed between the family members that the money for the purchase of the property would be put in by all of them but Genaro and Gustavo transferred all of their rights concerning this case to the Plaintiffs. When looking for an agent, Erik was referred to Defendant Karen…. Erik got into contact with Defendant Karen who ten referred Erik to speak to Defendant Hope who was a realtor.” (Complaint ¶25.) Plaintiffs allege that they paid Defendant Karen Kim the total sum of $230,000.00 to be used for the purchase of an investment property. Plaintiffs further allege that the funds transferred to Kim were not used towards the purchase of real property, and that Karen Kim refuses to pay back the $230,000.00.

The Complaint asserts the following causes of action:

(1) Breach of Contract;

(2) Fraud;

(3) Conversion;

(4) Breach of Implied Covenant of Good Faith and Fair Dealing;

(5) Breach of Fiduciary Duty;

(6) Negligent Supervision

Defendants HOPE Y. KIM and PARTNERS OF BUILDING CAPITAL, INC. (“Defendants”) specially and generally demur to Plaintiff’s first, second, third, fourth, and fifth causes of action.

Uncertainty

Defendants argue that the first through fifth causes of action are fatally uncertain because Partners of Building Capital, Inc. is a separate entity apart from Building Capital Partners, Inc., and Building Capital Partners LLC. Defendants maintain that Hope Kim does not have any interests or affiliations in Building Capital Partners, Inc. and Building Capital Partners, LLC. Since the Complaint refers to all 3 defendant-entities as “Defendant Building Capital”—it is uncertain which entity entered into a contract with Plaintiffs.

“A special demurrer for uncertainty is not intended to reach the failure to incorporate sufficient facts in the pleading but is directed at the uncertainty existing in the allegations actually made.” (Butler v. Sequeira (1950) 100 Cal.App.2d 143, 145-146.) However, demurrers for uncertainty will be sustained where the pleading is so bad that the defendant cannot reasonably respond, i.e., he or she cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against him or her. (Khoury v. Maly’s of Calif. Inc. (1993) 14 Cal.App.4th 612, 616.) 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.” (Ibid.)

Here, the Complaint fails to distinguish between three different entities, or allege their purported relationships to one another. 

The demurrer is properly sustained with 30 days leave to amend as to Defendant Partners of Building Capital, Inc. on grounds of uncertainty.

First Cause of Action – Breach of Contract

Whether it is written, oral, or implied, the elements of a cause of action for breach of contract are as follows: (1) the existence of a contract; (2) Plaintiff’s performance or excused non-performance; (3) Defendants’ breach; and (4) resulting damage to Plaintiff. (Reichert v. General Ins. Co. (1968) 68 Cal.2d 822, 830.) “If an action is based on a breach of written contract, the terms must be set forth verbatim in the body of the complaint or a copy of the contract must be attached and incorporated by reference.” (Id. at 459.) Alternatively, if the claim is based on a written contract, then “a plaintiff may 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.) Terms of an oral contract may be pleaded generally as to its effect, because it is rarely possible to allege the exact words. (Scolinos v. Kolts (1995) 37 Cal.App.4th 635, 640.)

Plaintiff fails to allege whether the purported agreement entered into by the parties is written or oral. Moreover, Plaintiff’s allegations are insufficient to plead the existence of either a written or oral contract. Plaintiff fails to either set forth the terms of the agreement between the parties verbatim in the Complaint, or incorporate the terms by reference. Plaintiff also fails to allege the legal effect and terms of the alleged contract between Plaintiff and Defendants, including obligations the alleged contract imposed upon the parties.

Defendants also argue that this cause of action is barred by the statute of frauds. “An agreement for the sale of real property or an interest in real property comes within the statute of frauds. (Civ. Code §1624, subd. (a)(3).)” (Secrest v. Security National Morg. Loan Trust 2002-2 (2008) 167 Cal.App.4th 544, 552.) However, equitable estoppel may preclude the use of a statute of frauds defense. (Byrne v. Laura (1997) 52 Cal.App.4th 1054, 1068.) Equitable estoppel applies “where an unconscionable injury would result from denying enforcement after one party has been induced to make a serious change of position in reliance on the contract or where unjust enrichment would result of the party who has received the benefits of the other’s performance where allowed to invoke the statute.” (Chavez v. Indymac Mortgage Svcs. (2013) 219 Cal.App.4th 1052, 1058.) Plaintiff’s facts, as alleged, insufficiently allege that equitable estoppel prohibits Defendants from asserting the statute of frauds.

Defendants’ demurrer to the first cause of action is SUSTAINED with 30 days leave to amend.

Second Cause of Action – Fraud

Elements of a cause of action for fraudulent inducement are: “(a) a misrepresentation (false representation, concealment, or nondisclosure); (b) scienter of knowledge of its falsity; (c) intent to induce reliance; (d) justifiable reliance; and (e) resulting damage. (Hinesley v. Oakshade Town Cir. (2005) 135 Cal.App.4th 289m 294.) “Fraud in the inducement is a subset of the tort of fraud. It ‘occurs when the promisor knows what he is signing but his consent is induced by fraud, mutual assent is present and a contract is formed, which, by reason of the fraud, is voidable.’ [Internal Citations Omitted.]” (Id. at 295.)

Fraud actions are subject to strict requirements of particularity in pleading. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216.) Fraud must be pleaded with specificity rather than with general and conclusory allegations. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) The specificity requirement means a plaintiff must allege facts showing how, when, where, to whom, and by what means the representations were made, and in the case of a corporate defendant, the plaintiff must allege the names of the persons who made the representations, their authority to speak on behalf of the corporation, to whom they spoke, what they said, or wrote, and when the representation was made. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)

The demurrer to the second cause of action is SUSTAINED with 30 days leave to amend. Plaintiffs do not allege facts, with specificity, to maintain a claim for fraud against these demurring defendants. As alleged, there are no misrepresentations specifically attributable to Hope Kim or Partners of Building Capital, Inc.

Third Cause of Action – Conversion

The elements of a cause of action for conversion are: (1) Plaintiff’s ownership or right to possession of personal property; (2) defendant’s disposition of the property inconsistent with plaintiff’s rights; and (3) resulting damages. (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 119.) “A cause of action for conversion of money can be stated only where a defendant interferes with the plaintiff’s possessory interest in a specific, identifiable sum, such as when a trustee or agent misappropriates the money entrusted to him.” (Kim v. Westmoor Partners, Inc. (2011) 201 Cal.App.4th 267, 284.)

The demurrer to the third cause of action is SUSTAINED with 30 days leave to amend. Plaintiff alleges that “[t]he other Defendants in this case played a part in the conversion of the Plaintiffs money by being Defendant Karen’s accomplices.” (Complaint ¶56.) This conclusory allegation is devoid of factual support. As alleged, it is unclear what role Hope Kim or Partners of Building Capital, Inc. played in any purported conversion/aiding and abetting of conversion.

Fourth Cause of Action – Breach of Implied Covenant of Good Faith and Fair Dealing

“The prerequisite for any action for breach of the implied covenant of good faith and fair dealing is the existence of a contractual relationship between the parties, since the covenant is an implied term in the contract.” (Smith v. San Francisco (1990) 225 Cal.App.3d 38, 49.)

For reasons articulated above, no contract between Plaintiffs and Defendants is adequately alleged. The demurrer to the fourth cause of action is SUSTAINED with 30 days leave to amend.

Fifth Cause of Action – Breach of Fiduciary Duty

“The elements of a claim for breach of fiduciary duty are (1) the existence of a fiduciary relationship, (2) its breach , and (3) damage proximately caused by that breach. [Citations Omitted.]” (Mendoza v. Continental Sales Co. (2006) 140 Cal.App.4th 1395, 1405.)

“Civil conspiracy is not an independent cause of action.” (Navarette v. Meyer (2015) 237 Cal.App.4th 1276, 1291.) “Instead, it is a theory of co-equal legal liability under which certain defendants may be held liable for an independent civil wrong.” (Id.) “A participant in the conspiracy effectively adopts as his or her own the torts of other coconspirators within the ambit of the conspiracy. (Id.) “The elements of an action for civil conspiracy are the formation and operation of the conspiracy and damage resulting to plaintiff from an act or acts done in furtherance of the common design.” (Id.) “In such an action the major significance of the conspiracy lies in the fact that it renders each participant in the wrongful act responsible as a joint tortfeasor for all damages ensuing the wrong, irrespective of whether or not he was a direct actor and regardless of the degree of his activity.” (Id.) “The essence of the claim is that it is merely a mechanism for imposing vicarious liability. Each member of the conspiracy becomes liable for all acts done by others pursuant to the conspiracy, and for all damages caused thereby.” (Id.) “Liability presupposes that the coconspirator is legally capable of committing the tort, i.e., that he or she owes a duty to plaintiff recognized by law and is potentially subject to liability for breach of that duty.” (Id. at 1292.)

Here, Plaintiffs seemingly seek to hold Hope Kim liable for breach of fiduciary duty under an “aiding and abetting” theory. However, no such factual support for such a theory is alleged. Moreover, Plaintiffs do not allege how Hope Kim and Partners of Building Capital, LLC breached their fiduciary duties owed to Plaintiffs, if any. Only the acts of Karen Kim are alleged to support this claim.

The demurrer to the fifth cause of action is SUSTAINED with 30 days leave to amend.