Judge Loren G. Freestone, Case Number: 37-2023-00005205-CL-BC-CTL, Date: 2024-05-24 Tentative Ruling

Judge: Loren G. Freestone, Case: 37-2023-00005205-CL-BC-CTL, Date: 2024-05-24 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - May 23, 2024

05/24/2024 10:30:00 AM C-64 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Loren G. Freestone

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Civil - Limited Breach of Contract/Warranty Demurrer / Motion to Strike 37-2023-00005205-CL-BC-CTL ROIC CALIFORNIA LLC VS BAUTISTA [IMAGED] CAUSAL DOCUMENT/DATE FILED:

TENTATIVE RULING Cross-Defendant ROIC California LLC's demurrer to Cross-Complainant Arwinnah Bautista's cross-complaint is SUSTAINED IN PART and OVERRULED IN PART.

ROIC's motion to strike portions of the cross-complaint is GRANTED.

Breach of Contract Bautista's first cause of action is for breach of contract.

ROIC argues that Bautista has not sufficiently alleged the existence of the oral and written contracts referenced in the cross-complaint.

A plaintiff may allege a cause of action for breach of contract-written or oral-simply by alleging the 'legal effect' of the contract. (Maxwell v. Dolezal (2014) 231 Cal.App.4th 93, 98; Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 616.) Here, Bautista alleges that the legal effect of the parties oral and written contracts was the creation of a landlord-tenant relationship. Specifically, in October 2013, Bautista allegedly agreed to lease, and ROIC allegedly agreed to provide, two suits (E-18 and E-19A) totaling 1,331 square feet of floor space that would be well ventilated, suitable for commercial use as a medical office, free from water leaks, protected against the elements, and with adequate utility services. For pleading purposes, this is sufficient.

ROIC also argues that this claim, to the extent it is predicated on contracts that were entered into in October 2013, is barred by the applicable statutes of limitation.

The statute of limitations for breach of written contract is four years. (Code Civ. Proc., § 337, subd. (a).) The statute of limitations for breach of oral contract is two years. (Id. at § 339(1).) However, '[w]hen an obligation or liability arises on a recurring basis, a cause of action accrues each time a wrongful act occurs, triggering a new limitations period. Because each new breach of such an obligation provides all the elements of a claim-wrongdoing, harm, and causation-each may be treated as an independently actionable wrong with its own time limit for recovery.' (Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1199–1200 [each time lessor billed lessee an unfair or fraudulent charge triggered a Calendar No.: Event ID: TENTATIVE RULINGS

3112164 34 CASE NUMBER: CASE TITLE: ROIC CALIFORNIA LLC VS BAUTISTA [IMAGED] 37-2023-00005205-CL-BC-CTL new statute of limitations].) In order to raise the statute of limitations on a demurrer, 'the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows that the action may be barred.' (Lee v. Hanley (2015) 61 Cal.4th 1225, 1232; see, e.g., Pulver v. Avco Financial Services (1986) 182 Cal.App.3d 622, 635; Moseley v. Abrams (1985) 170 Cal.App.3d 355, 359–360.) Here, the space ROIC provided Bautista was allegedly smaller and in worse condition than required by their contracts. ROIC also allegedly inflated common area charges based on the incorrect square footage, in addition to improperly charging Bautista for fees and management services. Each time Bautista paid rent, a new statute of limitations was triggered. The complaint does not indicate when the last rent payment was made. As such, it is not clear that the entire claim is barred by the applicable statues of limitations.

For the reasons set forth above, the demurrer to the first cause of action is overruled.

Negligent Misrepresentation / Fraud Bautista's second cause of action is for negligent misrepresentation. Bautista's third cause of action is for fraud.

ROIC argues that Bautista has not alleged each element of these causes of action with sufficient specificity.

The elements of a claim for fraudulent misrepresentation 'are (1) a misrepresentation, (2) knowledge of falsity, (3) intent to induce reliance, (4) actual and justifiable reliance, and (5) resulting damage.' (Aton Center, Inc. v. United Healthcare Ins. Co. (2023) 93 Cal.App.5th 1214, 1245.) The elements of a claim for negligent misrepresentation are similar, but instead of knowledge of falsity, only requires that the misrepresentation be made 'without reasonable ground for believing it to be true.' (Id. at pp.

1245–1246.) 'Each element in a cause of action for fraud or negligent misrepresentation must be factually and specifically alleged. The policy of liberal construction of pleadings is not generally invoked to sustain a misrepresentation pleading defective in any material respect.' (Cadlo v. Owens-Illinois, Inc. (2004) 125 Cal.App.4th 513, 519.) 'The particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered. A plaintiff's burden in asserting a fraud claim against a corporate employer is even greater. In such a case, the plaintiff must allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.' (Hamilton v. Greenwich Investors XXVI, LLC (2011) 195 Cal.App.4th 1602, 1614–1615, emphasis in original; see Scott v. JPMorgan Chase Bank, N.A.

(2013) 214 Cal.App.4th 743, 763–764.) Here, Bautista alleges that he was told the two suites would total 1,331 square feet of floor space, would be well ventilated, suitable for commercial use as a medical office, free from water leaks, protected against the elements, and with adequate utility services. Bautista also alleges that these representations were made around October 15, 2013 and resulted in him agreeing to lease the space. Yet several other details about the purported misrepresentations are missing. For example, how, where, and by what means were these statements communicated (e.g., in person onsite, via email, over the phone, etc.)? Who made the statements on behalf of ROIC (a member of the LLC, a manager of the LLC, a real estate agent, etc.)? What was that person's name? Other elements are also lacking the requisite particularity. For example, Bautista alleges that ROIC 'had no reason to believe that [its] representations were true or did not have a reasonable basis upon which Calendar No.: Event ID: TENTATIVE RULINGS

3112164 34 CASE NUMBER: CASE TITLE: ROIC CALIFORNIA LLC VS BAUTISTA [IMAGED] 37-2023-00005205-CL-BC-CTL to make such representations,' and that ROIC 'knew or should have known' that they were false.

Bautista also alleges that he 'reasonably relied on' and 'reasonably believed' the representations. But what specific facts show that ROIC either knew or should have known that the statements were false at the time they were made, and what specific facts show that Bautista's reliance was reasonable? (Compare McClain v. Octagon Plaza, LLC (2008) 159 Cal.App.4th 784, 793 [tenant was allegedly told by landlord's two principals that his unit was 2,624 square feet out of the total 11,835 square foot shopping center, making him responsible for 23% of the common expenses; landlord allegedly knew total square footage was understated, making tenant responsible for more than his fair share, because the correct amount (12,800 square feet) was listed on the landlord's application for earthquake insurance; tenant's reliance was also reasonable because when he attempted to confirm the size of his unit (which was also incorrectly stated), the principals acted offended, responded that measuring the area would be unreasonably costly, and insisted they had intimate knowledge of every detail of the shopping center, and repeatedly reassured the tenant that he could rely on their honesty and accuracy].) ROIC also argues that these claims, to the extent they are predicated on misrepresentations that occurred in October 2013, are barred by the applicable statutes of limitations.

The statute of limitations for fraud and negligent misrepresentation is three years. (Code Civ. Proc., § 338, subd. (d); see Broberg v. The Guardian Life Ins. Co. of America (2009) 171 Cal.App.4th 912, 920.) The misrepresentations were allegedly made in 2013. The complaint was not filed until 2023 and the cross-complaint was not filed until 2024-well beyond the statute of limitations.

Unlike the breach of contract claim, there is no basis for invoking the continuous accrual doctrine as to these claims. Whereas each improper collection of monthly rent can constitute a new breach of lease, there was only one set of alleged misrepresentations. Although Bautista may still be suffering from those alleged misrepresentations and the ensuing lease, that does not render these claims timely. (See Vaca v. Wachovia Mortgage Corp. (2011) 198 Cal.App.4th 737, 744–745 [although plaintiff was still suffering from fraudulent loans in the form of fees incurred pursuant to the terms of the mortgage, no subsequent acts of fraud were alleged, and therefore claims were time barred because 'if continuing injury from a completed act generally extended the limitations period, those periods would lack meaning'].) Both statutes of limitation are subject to delayed discovery (see Code Civ. Proc., § 338, subd. (d)), but a plaintiff must plead sufficient facts to invoke that doctrine. (See Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 809.) Bautista did not allege any facts explaining when he discovered the alleged misrepresentations and why he did not discovery them sooner.

For the reasons set forth above, the demurrer to the second and third causes of action is sustained.

Exemplary Damages The cross-complaint includes a separately captioned heading titled 'Exemplary Damages.' Bautista also prays for punitive damages.

ROIC demurs and moves to strike those allegations on the ground there is no standalone cause of action for punitive damages. ROIC also argues that Bautista has failed to sufficiently allege malice, fraud, or oppression for which it, as an LLC, can be held responsible.

Punitive damages can only be sought in 'an action for breach of obligation not arising from contract.' (Civ. Code, § 3294, subd. (a).) 'In the absence of an independent tort, punitive damages may not be awarded for breach of contract even where the defendant's conduct in breaching the contract was willful, fraudulent, or malicious.' (Cates Construction, Inc. v. Talbot Partners (1999) 21 Cal.4th 28, 61; accord Ginsberg v. Gamson (2012) 205 Cal.App.4th 873, 896.) In light of the above, all that remains is a single cause of action for breach of contract. That claim cannot Calendar No.: Event ID: TENTATIVE RULINGS

3112164 34 CASE NUMBER: CASE TITLE: ROIC CALIFORNIA LLC VS BAUTISTA [IMAGED] 37-2023-00005205-CL-BC-CTL support a prayer for punitive damages.

The motion to strike the 'Exemplary Damages' section and related prayer for punitive damages is therefore granted.

Conclusion The demurrer to the first cause of action is overruled.

The demurrer to the second and third cause of action is sustained. Bautista did not file an opposition.

Absent a request at the hearing, the demurrer to these claims is sustained without leave to amend. (See Das v. Bank of America (2010) 186 Cal.App.4th 727, 734, 745 ['the burden falls upon the plaintiff to show what facts he or she could plead to cure the existing defects in the complaint'].) The motion to strike the exemplary damages allegations and prayer for punitive damages is granted. To the extent the demurrer to the second and third causes of action is sustained without leave to amend, the motion to strike is also granted without leave to amend.

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