Judge Mark A. Young, Case Number: 23SMCV02845, Date: 2024-12-04 Tentative Ruling

Judge: Mark A. Young, Case: 23SMCV02845, Date: 2024-12-04 Tentative Ruling

Case Number: 23SMCV02845 Hearing Date: December 4, 2024 Dept: M

CASE NAME: Morgan, v. Camras

CASE NO.: 23SMCV02845

MOTION: Demurrer to the Third Amended Cross-Complaint

HEARING DATE: 12/4/2024

LEGAL STANDARD

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) 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. (CCP §§ 430.30, 430.70.) At the pleading stage, a plaintiff need only allege ultimate facts sufficient to apprise the defendant of the factual basis for the claim against him. (Semole v. Sansoucie (1972) 28 Cal. App. 3d 714, 721.) A “demurrer does not, however, admit contentions, deductions or conclusions of fact or law alleged in the pleading, or the construction of instruments pleaded, or facts impossible in law.” (S. Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732, internal citations omitted.)

“Liberality in permitting amendment is the rule, if a fair opportunity to correct any defect has not been given.” (Angie M. v. Superior Court (1995) 37 Cal.App.4th 1217, 1227.) It is an abuse of discretion for the court to deny leave to amend where there is any reasonable possibility that plaintiff can state a good cause of action. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) The burden is on plaintiff to show¿in what manner¿plaintiff can amend the complaint, and¿how¿that amendment will change the legal effect of the pleading.¿(Id.)

ANALYSIS

Defendant Scott Morgan demurs to Cross-Complainant Roger Camras’ Third Amended Cross-Complaint (“TACC”), including the Second (Fraud), Third (Ejectment), and Fourth (Financial Elder Abuse) causes of action. Cross-Complainant admits that Cross-Defendant is no longer in possession of the Property and therefore, the demurrer to the Third Cause of Action for Ejectment is moot.

Fraud

Defendant argues that the complaint fails to allege fraud with specificity, in particular, the knowledge of falsity, intent to defraud, and justifiable reliance elements. The elements of fraud are: “(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Charnay v. Cobert (2006) 145 Cal.App.4th 170, 184.) In California, fraud must be pled with specificity. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) “The particularity demands that a plaintiff plead facts which show how, when, where, to whom, and by what means the representations were tendered.” (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469.)

Generally, the TACC alleges that on September 1, 2009, Cross-Defendant introduced Ric St. John to Cross-Complainant, who desired to rent a room at the Property. (SACC ¶ 13.) Cross-Defendant “represented that Ric St. John was honest, reputable, clean, and would pay the agreed rent and would otherwise be a good tenant. Cross-defendant SCOTT MORGAN did not disclose any history by Ric St. John of destruction of property, criminal activity, identity theft, or violence.” (¶14.) Cross-Complainant relied on the representations of Cross-defendant SCOTT MORGAN and believed them to be true. (¶ 15.) The representations were false and, at the time he made them, Cross-defendant knew that the representations were false. (¶16.) Cross-Defendant failed to disclose facts which materially qualify the representations and render his disclosure misleading. (Id.) He knew that this was false at the time, as he has admitted to longstanding prior knowledge of Ric St. John’s history as a con-artist, criminal, and thief. (Id.) If Cross-complainant had known the truth regarding Ric St. John’s history of dishonest behavior, he would have never been allowed to step foot on the Property or be a tenant. (¶ 18.) Thus, the TACC alleges justifiable reliance and knowledge of falsity, with specific supporting facts.

Cross-Defendant notes that an express allegation of an intent to defraud/induce reliance is absent from the TACC. However, the circumstances alleged establishes an inference that Cross-Defendant intended to induce Cross-Complainant into the Lease with St. John. (Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1238 [courts must liberally draw inferences favorable to the non-demurring party]; Buller v. Sutter Health (2008) 160 Cal.App.4th 981, 986 [the court must assume the truth of facts that may be implied or reasonably inferred from the express allegations].) In fraud causes of action, a “defendant's intent to induce the plaintiff to alter his position can be inferred from the fact that defendant knew the plaintiff would act in reliance upon the representation.” (Eddy v. Sharp, (1988) 199 Cal. App. 3d 858, 864.) Here, the specific allegations demonstrate that Cross-Defendant misrepresented St. John as “honest, reputable, clean, and would pay the agreed rent and would otherwise be a good tenant” without disclosing a known history of destruction of property, criminal activity, identity theft, or violence. Cross-Defendant represented St. John as an acceptable tenant with the apparent purpose for Cross-Complainant to rely on such representations and lease the property to St. John. From such facts, the Court can reasonably infer that Cross-Defendant intended to induce reliance on his express misrepresentations.

Accordingly, the demurrer is OVERRULED.

Financial Elder Abuse

Defendant demurs to the elder abuse cause of action on the grounds that the TACC does not allege that Cross-Defendant retained the Property for wrongful use or with the intent to defraud Cross-Defendant and acted with recklessness, malice, oppression, or fraud.

A plaintiff claiming elder abuse must allege (1) she is an elder adult and (2) a defendant took, secreted, appropriated, or retained her real or personal property, or assisted another to do so, (3) to a wrongful use, with an intent to defraud, or by undue influence. (Welf. & Inst. Code § 15610.30 (a); Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 174.) For the purposes of the abuse statute, an elder means any person residing in this state, 65 years of age or older.” (Welf. & Inst. Code § 15610.27.) “[A] wrongful use is defined as taking, secreting, appropriating, or retaining property in bad faith. Bad faith occurs where the person or entity knew or should have known that the elder had the right to have the property transferred or made readily available to the elder or to his or her representative. [Citation.]” (Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 174.)

The TACC alleges that by ousting Cross-Complainant from the Property and squatting in the Property against Cross-Complainant’s will, Cross-Defendant took or retained an elder’s property for a wrongful use with the intent to defraud. (SACC ¶¶ 36-37.) The wrongful use and fraud are premised on the prior causes of action for breach of lease and fraud. As discussed infra, the TACC establishes a cause of action for fraud. Further, the breach of lease cause of action is not challenged. Thus, Cross-Defendant is alleged to be wrongfully retaining the Property with an intent to defraud.

Accordingly, the demurrer is OVERRULED. Cross-Defendant to file an answer within 20 days.