Judge: Mark A. Young, Case: 19SMCV1365, Date: 2022-10-04 Tentative Ruling

Case Number: 19SMCV1365    Hearing Date: October 4, 2022    Dept: M

CASE NAME:           Nouri, v. Lundgren, et al.

CASE NO.:                19SMCV01365 

MOTION:                  Motion for Summary Judgment/Adjudication

HEARING DATE:   10/4/2022

TENTATIVE RULING

Defendants’ motions for summary judgment and adjudication are DENIED.

BACKGROUND

On August 1, 2019, Plaintiff Armin Nouri brought the instant action against Defendants Angela Lundgren, individually and as trustee of the Angela Lundgren Trust dated December 27, 2012; Sharon L. Lundgren, individually and as trustee of the Angela Lundgren Trust dated December 27, 2012; Ronald Wynn and Coldwell Banker Residential Brokerage. Defendants allegedly failed to disclose a City-noticed construction project to Plaintiff in connection with the sale of the Residence, which affected the value of the Residence. The operative first amended complaint asserts four causes of action for (1) breach of contract for the sale of real property; (2) violations of California Civil Code sections 1102 et seq.; (3) fraudulent misrepresentations, omissions, and concealment; and (4) negligent misrepresentations, omissions, and concealment.

On January 13, 2022, the Lundgrens filed a motion for summary judgment against the FAC. Plaintiff opposes.

Legal Standard

            A party may move for summary judgment in any action or proceeding if it is contended the action has no merit or that there is no defense to the action or proceeding. (CCP, § 437c(a).) “The purpose of the law of summary judgment is to provide courts with a mechanism to cut through the parties' pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.)

“A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if the party contends that the cause of action has no merit, that there is no affirmative defense to the cause of action, that there is no merit to an affirmative defense as to any cause of action, that there is no merit to a claim for damages, as specified in Section 3294 of the Civil Code, or that one or more defendants either owed or did not owe a duty to the plaintiff or plaintiffs.” (CCP, § 437c(f)(1).) If a party seeks summary adjudication as an alternative to a request for summary judgment, the request must be clearly made in the notice of the motion. (Gonzales v. Superior Court (1987) 189 Cal.App.3d 1542, 1544.)  “[A] party may move for summary adjudication of a legal issue or a claim for damages other than punitive damages that does not completely dispose of a cause of action, affirmative defense, or issue of duty pursuant to” subdivision (t). (CCP, § 437c(t).) 

            To prevail, the evidence submitted must show there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law. (CCP, § 437c(c).) The motion cannot succeed unless the evidence leaves no room for conflicting inferences as to material facts; the court has no power to weigh one inference against another or against other evidence. (Murillo v. Rite Stuff Food Inc. (1998) 65 Cal.App.4th 833, 841.) In determining whether the facts give rise to a triable issue of material fact, “[a]ll doubts as to whether any material, triable, issues of fact exist are to be resolved in favor of the party opposing summary judgment…” (Gold v. Weissman (2004) 114 Cal.App.4th 1195, 1198-99.) “In other words, the facts alleged in the evidence of the party opposing summary judgment and the reasonable inferences there from must be accepted as true.” (Jackson v. County of Los Angeles (1997) 60 Cal.App.4th 171, 179.) However, if adjudication is otherwise proper the motion “may not be denied on grounds of credibility,” except when a material fact is the witness’s state of mind and “that fact is sought to be established solely by the [witness’s] affirmation thereof.” (CCP, § 437c(e).) 

            Once the moving party has met their burden, the burden shifts to the opposing party “to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto.” (CCP § 437c(p)(1).) “[T]here is no obligation on the opposing party... to establish anything by affidavit unless and until the moving party has by affidavit stated facts establishing every element... necessary to sustain a judgment in his favor.” (Consumer Cause, Inc. v. SmileCare (2001) 91 Cal.App.4th 454, 468.) 

“The pleadings play a key role in a summary judgment motion. The function of the pleadings in a motion for summary judgment is to delimit the scope of the issues and to frame the outer measure of materiality in a summary judgment proceeding.” (Hutton v. Fidelity National Title Co. (2013) 213 Cal.App.4th 486, 493, quotations and citations omitted.) “Accordingly, the burden of a defendant moving for summary judgment only requires that he or she negate plaintiff's theories of liability as alleged in the complaint; that is, a moving party need not refute liability on some theoretical possibility not included in the pleadings.” (Ibid.) 

EVIDENTIARY ISSUES

Plaintiff’s objections are OVERRULED.

Defendants’ objections are OVERRULED.

Analysis

Defendants move to adjudicate each cause of action on two general arguments. First, the Lundgrens argue that they did not know about the Project, and, therefore, could not have reasonably disclosed that material fact. This would tend to defeat the knowledge requirement embedded in each cause of action. Second, Plaintiff has not suffered any damages because the contraction of the Project has not commenced.

Issue No. 1:

Each of the causes of action have a “knowledge” element.

“[W]here the seller knows of facts materially affecting the value or desirability of the property . . . and also knows that such facts are not known to, or within the reach of the diligent attention and observation of the buyer, the seller is under a duty to disclose them to the buyer.” (Calemine v. Samuelson (2009) 171 Cal.App.4th 153, 161, emphasis added.) “Where a seller fails to disclose a material fact, he may be subject to liability ‘for mere nondisclosure since his conduct in the transaction amounts to a representation of the nonexistence of the facts which he has failed to disclose [citation].’” (Id.) Whether or not has a seller has “actual knowledge of an undisclosed fact is obviously a question of fact[.]” (Shapiro v. Sutherland (1998) 64 Cal.App.4th 1534, 1544.)

A claim for fraud must plead all of the following elements: (1) misrepresentation; (2) knowledge of falsity; (3) intent to induce reliance; (4) justifiable reliance; and (5) resulting damage.  (Wilhelm v. Pray, Price, Williams & Russell (1986) 186 Cal.App.3d 1324, 1332.) There are four scenarios “in which nondisclosure or concealment may constitute actionable fraud: (1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representations but also suppresses some material facts. [Citation.]” (LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336.) 

Similarly, the elements of negligent misrepresentation are “(1) the misrepresentation of a past or existing material fact, (2) without reasonable ground for believing it to be true, (3) with intent to induce another’s reliance on the fact misrepresented, (4) justifiable reliance on the misrepresentation, and (5) resulting damage. [Citation.]” (National Union Fire Insurance Co. of Pittsburgh, PA v. Cambridge Integrated Services Group, Inc. (2009) 171 Cal.App.4th 35, 50.) Negligent misrepresentation has been described as being based on “a duty to communicate accurate information.” (Friedman v. Merck Co. (2003) 107 Cal.App.4th 454, 477.)

Except for the negligence claims, summary judgment would be appropriate if it is undisputed that Defendants had no “actual” knowledge of the Project. The FAC alleges that Defendants gained knowledge of this Project specifically from a set of letters sent by the City which gave notice of the project. (FAC ¶¶ 15-16.) “As then-owners of the Residence, Sellers received the September 9, 2014 and April 16, 2015 Letters, knew about their contents, and [thus] knew about the Project.” (FAC ¶ 15.)

The Lundgrens disclaim that they had any knowledge about the development project located at 2136- 2140 Westwood Boulevard, Los Angeles. California 90025 before or during the sale of the Residence to Plaintiff. (UMF 1-4.) This disclaimer comes with caveats. From 2006-2016, the Lundgrens utilized a PO Box rather than the mail receptacle at the Residence. The Lundgrens claim that this was their “primary” mailbox. Otherwise, only “junk mail” was sent there. (See A. Lundgren Decl., ¶ 18.) Arguably, this statement would not rebut the allegations concerning notice from the Letters. A. Lundgren does not state that she did not ever check the Residence’s mailbox. In fact, her statement implies that she did, but that she only ever received junk mail.

Defendants’ evidence raises a section 437c(e) issue: “[S]ummary judgment may be denied in the discretion of the court if the only proof of a material fact offered in support of the summary judgment is an affidavit or declaration made by an individual who was the sole witness to that fact; or if a material fact is an individual's state of mind, or lack thereof, and that fact is sought to be established solely by the individual's affirmation thereof.” Here, Defendants simply disclaim that they had actual knowledge of the Project, a fact solely in their state of mind and only by bare affirmation. Thus, the Court has the discretion to find this evidence insufficient to meet Defendants’ burden. Otherwise, the affirmation is sufficient to shift the burden on only the claims requiring “actual” knowledge. Therefore, Defendants have met their burden on the first, second and third causes of action.

As to those causes, Plaintiff presents a dispute of fact as to whether Defendants truly would not have had notice from the City’s Letters informing them of the Project, and thus had actual knowledge. As noted, on September 9, 2014, the City mailed a letter to all owners of properties abutting the Project, including to the Property, stating that the City was conditionally approving the Project. The City subsequently mailed another letter to the abutting property owners, including to the Property, on April 16, 2015, explaining a modification to the Project. A. Lundgren resided at the Property during the time the Letters were mailed. (PMF 19.) Plaintiff presents evidence that A. Lundgren used both the mail receptacle at the Property as well as a PO Box to receive mail. Specifically, in a May 16, 2014, permit application, the Lundgrens expressly identified the Property as her and the Trust’s mailing address. (PMF 21; P. Evid., Exs. 26-27.) The Trust Transfer Deed granting the Property to the Trust indicates that tax statements were to be mailed to the Lundgrens at the Property, also contradicting A. Lundgren’s claim that important mail only went to the PO Box. (PMF 22.) At the very least, a question of fact exists as to Defendants’ knowledge.

Accordingly, the motion for summary judgment/adjudication cannot be granted on this issue.

Issue no. 2: Damages

Defendants argue that because it is undisputed that construction of the Potential Project has still not commenced (UMF 5), Plaintiff can only show speculative damages. However, this does not address all of the damages claimed.

The complaint alleges that “the Buyer has been harmed and damaged in that Buyer: a) entered into the PSA; b) proceeded with (and did not terminate) the PSA per paragraph 14(B(1)); c) purchased the Residence at the Purchase Price (which was overstated); d) and/or incurred the Renovations after purchase.” (FAC ¶ 34, emphasis added.) This includes “out-of-pocket costs and expenses; monetary losses attributable to discomfort and annoyance living next to the construction of the Project and its aftermath; loss of time costs and expenses related to the Renovations; loss of use and enjoyment of the Residence; lost rental value of the Residence; the difference between the Purchase Price and the value of the Residence as represented; the difference between the Purchase Price and the actual fair market value of the Residence at time of sale; and other damages incurred in reliance on Defendants’ actions, inactions, and representations.” (Id., emphasis added.) Plaintiff further would not have entered into the agreement if they had known the truth about the construction Project. (FAC ¶ 12.)

Defendants proffer evidence that the construction has not commenced, and thus Plaintiff has not suffered any damages related to the construction, or that such damages are speculative. As noted, Plaintiff claims damages beyond the annoyance of construction. Notably, Plaintiff claims damages for their reliance on Defendants’ omissions discussed above. Plaintiff claims that they currently have out of pocket expenses, such as the Renovations, that they would not have incurred but for Defendants’ omission. As Defendants have not addressed the alleged damages, Defendants have not met their initial burden.

In any event, Plaintiff would present a dispute of fact here, since they proffer evidence that the owners of the Property intend to move forward with the Project.

Accordingly, Defendants’ motion is DENIED.