Judge: Lynne M. Hobbs, Case: 24STCV26948, Date: 2025-06-09 Tentative Ruling
Case Number: 24STCV26948 Hearing Date: June 9, 2025 Dept: 61
TG INVESTMENTS & CONSULTING, INC. vs BARBARA ANDERSON, et al.
Tentative:
Defendant Granite Escrow & Settlement Services’ Demurrer to the Complaint is SUSTAINED without leave to amend.
Moving party to provide notice.
Analysis:
I. DEMURRER
A demurrer should be sustained only where the defects appear on the face of the pleading or are judicially noticed. (Code Civ. Pro., §§ 430.30, et seq.) In particular, as is relevant here, a court should sustain a demurrer if a complaint does not allege facts that are legally sufficient to constitute a cause of action. (See id. § 430.10, subd. (e).) As the Supreme Court held in Blank v. Kirwan (1985) 39 Cal.3d 311: “We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. . . . Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context.” (Id. at p. 318; see also Hahn. v. Mirda (2007) 147 Cal.App.4th 740, 747 [“A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. [Citation.]”) “In determining whether the complaint is sufficient as against the demurrer … if on consideration of all the facts stated it appears the plaintiff is entitled to any relief at the hands of the court against the defendants the complaint will be held good although the facts may not be clearly stated.” (Gressley v. Williams (1961) 193 Cal.App.2d 636, 639.) “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.” (Khoury v. Maly’s of Cal., Inc. (1993) 14 Cal.App.4th 612, 616.) Such demurrers “are disfavored, and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.” (Mahan v. Charles W. Chan Insurance Agency, Inc. (2017) 14 Cal.App.5th 841, 848.)
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. (Schifando v. City of Los Angeles, supra, 31 Cal.4th at p. 1081.) The demurrer also may be sustained without leave to amend where the nature of the defects and previous unsuccessful attempts to plead render it probable plaintiff cannot state a cause of action. (Krawitz v. Rusch (1989) 209 Cal.App.3d 957, 967.)
Defendant Granite Escrow & Settlement Services (Defendant) demurrers to the Complaint on the grounds that the facts alleged establish that its only involvement in the transaction was to provide escrow services, and thus had no duty to identify or disclose any defects or encumbrances on the title to the property. (Demurrer at pp. 7–9.)
It is indisputably true that “[a]n escrow holder is the limited agent and fiduciary of all parties to an escrow” and that as such it has “a fiduciary duty ‘to communicate to his principal knowledge acquired in the course of his agency with respect to material facts which might affect the principal's decision as to a pending transaction....’ ” (Kirby v. Palos Verdes Escrow Co., Inc. (1986) 183 Cal.App.3d 57, 64, 227 Cal.Rptr. 785.) However, it is equally true that “the agency which exists (and the obligations pursuant thereto) is a limited one. If the several escrow instructions create in the escrow holder an agency, it must be one limiting the obligations of the escrow holder to each party to the escrow in accordance with the instructions given by such party.... [I]t is generally held that no liability attaches to the escrow holder for his failure to do something not required by the terms of the escrow or for a loss incurred while obediently following his escrow instructions. [Citations.]” (Hannon v. Western Title Ins. Co. (1989) 211 Cal.App.3d 1122, 1128, 260 Cal.Rptr. 21, internal quotation marks omitted; Schaefer v. Manufacturers Bank (1980) 104 Cal.App.3d 70, 77–78, 163 Cal.Rptr. 402; accord, Lee v. Escrow Consultants, Inc. (1989) 210 Cal.App.3d 915, 921, 259 Cal.Rptr. 117 [“[T]he fiduciary relationship between plaintiff [purchaser] and defendant [escrow holder] is limited to defendant carrying out the escrow instructions....”].) (Siegel v. Fidelity Nat. Title Ins. Co. (1996) 46 Cal.App.4th 1181, 1193–1194.)
Plaintiff TG Investments & Consulting, Inc. (Plaintiff) alleges that Defendant provided escrow services on the real property transaction that is the subject of this litigation. (Complaint ¶ 11.) It is alleged that Defendant Granite, along with other defendants, failed to disclose the existence of a $223,000 encumbrance on the property. (Complaint ¶¶ 13–15.) But Plaintiff does not allege that Defendant was obliged to investigate or disclose encumbrances in title pursuant to the applicable escrow instructions. Under the above authority, this means that Defendant cannot be said to have had a duty to disclose the encumbrance for the purposes of Plaintiff’s negligence claims (See Thomas v. Stenberg (2012) 206 Cal.App.4th 654, 662 [identifying duty as element of negligence claim]), nor a fiduciary or contractual duty for the purposes of its claim for breach of same. Plaintiff’s claims for misrepresentation, likewise based on Defendant’s duty to disclose, also fail. (Complaint ¶¶ 51, 67.) Plaintiff has filed no opposition to the present demurrer.
The demurrer is therefore SUSTAINED without leave to amend.