Judge Lisa K. Sepe-Wiesenfeld, Case Number: 21SMCV01950, Date: 2023-08-25 Tentative Ruling

Judge: Lisa K. Sepe-Wiesenfeld, Case: 21SMCV01950, Date: 2023-08-25 Tentative Ruling

“[A] demurrer tests the legal sufficiency of the allegations in a complaint.” (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.) A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (See Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994 [in ruling on a demurrer, a court may not consider declarations, matters not subject to judicial notice, or documents not accepted for the truth of their contents].) For purposes of ruling on a demurrer, all facts pleaded in a complaint are assumed to be true (Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 967), but the Court does not “assume the truth of contentions, deductions, or conclusions of fact or law” (Moore v. Regents of University of California (1990) 51 Cal.3d 120, 125).

Further, the court may, upon motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. (Code Civ. Proc., § 436, subd. (a).) The court may also strike all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (Code Civ. Proc., § 436, subd. (b).) The grounds for a motion to strike are that the pleading has irrelevant, false, or improper matter, or has not been drawn or filed in conformity with laws. (Code Civ. Proc., § 436.) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Code Civ. Proc., § 437.)

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (See Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 [court shall not “sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment”]; Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1037 [“A demurrer should not be sustained without leave to amend if the complaint, liberally construed, can state a cause of action under any theory or if there is a reasonable possibility the defect can be cured by amendment.”]; Vaccaro v. Kaiman (1998) 63 Cal.App.4th 761, 768 [“When the defect which justifies striking a complaint is capable of cure, the court should allow leave to amend.”].) The burden is on the complainant to show the Court that a pleading can be amended successfully. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

In his First Amended Complaint, Plaintiff asserts claims for breach of contract, breach of fiduciary duty, fraud and deceit, negligent misrepresentation, and negligence. As to breach of contract, Plaintiff alleges that Defendant William S. Jensen breached the Vacant Land Purchase Agreement and Joint Escrow Instructions (“the agreement”) by failing to deliver the property with a valid, enforceable easement as required under the agreement, and Defendant First American Title Company (“First American”) breached the agreement by denying Plaintiff’s claim under his title insurance. (First. Am. Compl. ¶¶ 31, 38.) Plaintiff alleges Defendants Forward Sunset, Inc. dba Keller Williams Realty and Esther Marie Lafa breached their fiduciary duty to Plaintiff by failing to ensure that the property matched the legal description in the agreement and grant deed. (First Am. Compl. ¶ 46.) Plaintiff also alleges that Defendants Jensen, William Moss, and Coldwell Banker Residential Brokerage Company (“Coldwell Banker”) defrauded him by deceiving Plaintiff into purchasing land known to be landlocked. (First Am. Compl. ¶¶ 50-52.) Plaintiff brings negligent misrepresentation and negligence claims against all defendants for failure to deliver the property with a valid, enforceable easement and misrepresenting the existence of the same. (First Am. Compl. ¶¶ 57-60, 67-72.)

To state a cause of action for breach of contract, Plaintiff must be able to state “(1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.) While First American argues that Plaintiff was not permitted to amend this claim, the Court’s order dated Mach 23, 2023, allowed Plaintiff opportunity to amend the claim in the body of its ruling, despite the “ruling” portion of the order stating otherwise. As to Plaintiff’s breach of contract claim, Plaintiff must be able to point to a contractual provision which required First American to research the easement sought by Plaintiff, as he alleges the denial of his claim was First American’s own fault for its lack of diligence (First Am. Compl. ¶ 38), but Plaintiff does not identify any such provision, and the agreement instead states that Plaintiff accepted title to the property “in its present condition subject to all encumbrances, easements, covenants, conditions, restrictions, rights and other matters whether of record or not.” (First Am. Compl. ¶ 16, Ex. A, at ¶ 18(B).) It follows that the trier of fact has no basis to conclude that First American breached an agreement for title insurance when Plaintiff took the property in this manner. Accordingly, First American’s demurrer to the first cause of action is SUSTAINED with thirty (30) days leave to amend.

“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 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.) 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.)

As to Plaintiff’s fraud claim, Plaintiff has not sufficiently set forth the nature of the purported misrepresentations made to him by Moss or a representative from Coldwell Banker, and it is axiomatic that 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.) Plaintiff provides only a conclusory statement that Moss “represented directly to Plaintiff that the easement to the Property existed and was valid and enforceable.” (First Am. Compl. ¶ 51.) Plaintiff also states that Moss and Coldwell Banker had prior knowledge that Jensen did not own an enforceable easement, but this, too, is a conclusory statement. (First Am. Compl. ¶ 52.) Plaintiff alleges his negligent misrepresentation claim against all Defendants, but he fails to allege the specific misrepresentations that were made to him to represent that the easement was valid. Plaintiff also fails to identify the corporate representative who made such statements to him and when such statements were made. Accordingly, Defendants’ demurrers to the third and fourth causes of action are SUSTAINED with thirty (30) days leave to amend.

To establish a claim for negligence, Plaintiff must establish the elements of (1) “the existence of a legal duty of care,” (2) “breach of that duty,” and (3) “proximate cause resulting in an injury.” (McIntyre v. Colonies-Pacific, LLC (2014) 228 Cal.App.4th 664, 671.) Plaintiff’s negligence claim is based on the same facts set forth in the other causes of action, and Plaintiff fails to set forth how First American breached any duty to him by failing to research the easement or reimburse him when he agreed to take the property as is. Plaintiff also fails to state the nature of a duty owed to him by West Coast Escrow to ensure all documents were signed by Jensen when West Coast Escrow was a mere escrow agent, he fails to allege the terms of escrow required West Coast Escrow to obtain such signatures, and there is no basis to conclude that any failure to obtain signatures was the cause of Plaintiff’s purported harm. Accordingly, Defendants’ demurrers to the fifth cause of action are SUSTAINED with thirty (30) days leave to amend.