Judge Lisa K. Sepe-Wiesenfeld, Case Number: 23SMCV01715, Date: 2024-10-01 Tentative Ruling

Judge: Lisa K. Sepe-Wiesenfeld, Case: 23SMCV01715, Date: 2024-10-01 Tentative Ruling

Plaintiffs Mir Ali Akbar Helmi and Mahnaz Yazdanmanesh may amend their complaint only as authorized by the Court’s order and may not amend the complaint to add a new party or cause of action without having obtained permission to do so. (Harris v. Wachovia Mortgage, FSB (2010) 185 Cal.App.4th 1018, 1023.)

Defendants Shawn S. Rabbani and Hertz Investment Company, LLC (“Defendants”) request judicial notice of Plaintiffs Mir Ali Akbar Helmi and Mahnaz Yazdanmanesh (“Plaintiffs”)’s First Amended Complaint (“FAC”) in this action. Defendants’ request is GRANTED pursuant to Evidence Code section 452, subdivision (d).

“[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).

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.)

Put simply, the FAC is confusing – for one, the bodies of the first and third causes of action make it appear that Defendant Hertz is named in those claims, but Hertz is not identified in the heading – but, in any event, it appears that in the first cause of action, Plaintiffs allege that Defendants were part of a conspiracy with other defendants, who owed a fiduciary duty to Plaintiffs in their capacity as dual agents and brokers; specifically, those other defendants should have disclosed that Rabbani and Hertz supervised and paid for construction work done without proper permits, and Defendants Rabbani and Hertz should have disclosed that the property had been redone without permits and the property’s square footage. (FAC ¶¶ 31, 33, 34.) While the other defendants who acted as brokers may have fiduciary duties to Plaintiffs, the nature of any such duty owed to Plaintiffs by Defendants is unclear as alleged. According to the FAC, Rabbani was the seller of the subject property, and Hertz is controlled by Rabbani, such that both participated in the remodeling and repair of the property. (FAC ¶¶ 3A, 3B.) This does not describe a fiduciary duty to Plaintiffs. The opposition does nothing to help describe the nature of the duty owed by either Defendant. Accordingly, Defendants’ 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 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.) 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.)

In the third cause of action, Plaintiffs allege that Rabbani conspired with other defendants to defraud Plaintiffs by failing to disclose material facts necessary to purchase the property with all information. (FAC ¶ 48.) Plaintiffs make only general statements about the concealment and misrepresentations that were made to them, and it is not clear from the body of the claim whether Plaintiffs intend to hold Hertz liable in this claim. As to Rabbani, there are no allegations about the nature of the fraud by Rabbani, and if Plaintiffs intend to hold Rabbani liable under a conspiracy theory, Plaintiffs must allege the elements of a conspiracy, which they have not sufficiently done here. [“The elements of a civil conspiracy are (1) the formation of a group of two or more persons who agreed to a common plan or design to commit a tortious act; (2) a wrongful act committed pursuant to the agreement; and (3) resulting damages” (City of Industry v. City of Fillmore (2011) 198 Cal.App.4th 191, 212.) For those reasons, Defendants’ demurrer to the third cause of action is SUSTAINED with thirty (30) days leave to amend.