Judge: Mark C. Kim, Case: 19STCV16540, Date: 2023-02-02 Tentative Ruling
Case Number: 19STCV16540 Hearing Date: February 2, 2023 Dept: S27
1. Background Facts
Plaintiff, Stephen Forde filed this
action against Defendants, Brent M. Friedland, Seaside Real Estate Services,
Todd Wohl, Braun International Real Estate, Randy Taylor, Reyna Taylor, Stephen
Hawrylack, Ray Craemer, 628 W. Imperial LP, Jinyu Jia, Hao Xu, Kelvin Tran, and
Trang Do on 5/13/19. The complaint
arises out of the relationship between Plaintiff, Taylor/Taylor, and Hawrylack,
all of whom jointly own two properties, referred to in the complaint as Maple 1
and Maple 2. Plaintiff and the
Taylor/Hawrylack defendants have been engaged in litigation since 2011. At ¶107 of the complaint, Plaintiff clarifies
that the Court granted Taylor and Hawrylack’s request to appoint a receiver to
sell both of the subject properties; the order was entered on 5/31/18.
As it relates to the defendants who
are demurring today, Friedland and Wohl, Plaintiff asserts claims for
negligence, fraud, and intentional interference with economic advantage. Plaintiff alleges, at ¶¶114, et seq., that
Friedland was the appraiser in connection with the sale of the two
properties. Plaintiff alleges, at ¶¶129,
et seq., that Wohl was the listing agent on the subject properties. Plaintiff alleges Friedland and Wohl engaged
in a variety of wrongful acts in connection with the sale of the property, all
of which taken together caused the property to be sold for less than full
value, which caused Plaintiff damages.
2. Demurrers
a. Standard
on Demurrer
A demurrer is a pleading used to test the legal sufficiency of other pleadings.
It raises issues of law, not fact, regarding the form or content of the
opposing party’s pleading. It is not the function of the demurrer to challenge
the truthfulness of the complaint; and for purpose of the ruling on the
demurrer, all facts pleaded in the complaint are assumed to be true, however
improbable they may be.
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.
Blank v. Kirwan 39 Cal.3d 311 (1985). No other extrinsic evidence can be
considered (i.e., no “speaking demurrers”). A demurrer is brought under CCP §
430.10 [grounds], § 430.30 [as to any matter on its face or from which judicial
notice may be taken], and § 430.50(a) [can be taken to the entire complaint or
any cause of action within]. Specifically, a demurrer may be brought per CCP §
430.10(e) if insufficient facts are stated to support the cause of action
asserted. Per CCP §430.10(a) a demurrer may be brought where the court has no
jurisdiction of the subject of the cause of action alleged in the pleading.
Furthermore, demurrer for uncertainty will be sustained only where the
complaint is so bad that the defendant cannot reasonably respond. CCP §
430.10(f).
However, in construing the allegations, the court is to give effect to
specific factual allegations that may modify or limit inconsistent general or
conclusory allegations. Financial Corporation of America v. Wilburn, 189
Cal.App.3rd 764, 769 (1987). And, if the facts pled in the complaint are
inconsistent with facts which are incorporated by reference from exhibits
attached to the complaint, the facts in the incorporated exhibits control.
Further, irrespective of the name or label given to a cause of action by the
plaintiff, a general demurrer must be overruled if the facts as pled in the
body of the complaint state some valid claim for relief. Special demurrers are
not allowed in limited jurisdiction courts. (CCP § 92(c).)
Leave to amend
must be allowed where there is a reasonable possibility of successful
amendment. Goodman v. Kennedy, 18 Cal.3d 335, 348 (1976). The burden is on the
complainant to show the Court that a pleading can be amended successfully.
(Id.)
Finally, CCP section 430.41 requires that “[b]efore filing a demurrer
pursuant to this chapter, the demurring party shall meet and confer in person
or by telephone with the party who filed the pleading that is subject to
demurrer for the purpose of determining whether an agreement can be reached that
would resolve the objections to be raised in the demurrer.” (CCP §430.41(a).)
The parties are to meet and confer at least five days before the date the
responsive pleading is due. (CCP §430.41(a)(2).) Thereafter, the demurring
party shall file and serve a declaration detailing their meet and confer
efforts. (CCP §430.41(a)(3).)
b. Meet and Confer
Defense Counsel declares he met and conferred with Plaintiff’s attorney
prior to filing these demurrers.
Notably, Plaintiff substituted himself in as counsel in this action on
the same day the meet and confer efforts took place. The Court finds the meet and confer efforts
were sufficient and no further meet and confer with Plaintiff, in pro per,
would likely have resolved the issues on demurrer. The Court will therefore rule on the
demurrers on their merits.
c. Requests
for Judicial Notice
Defendants seek judicial notice of
the 5/31/18 interlocutory judgment for partition by sale and the 11/07/18
orders re: referee’s application for orders.
The RJNs are granted.
d. Parties’
Positions
Friedland and Wohl have each filed
demurrers to the complaint. While the
demurrers are separately filed, they are substantially similar such that they
will be analyzed together. Defendants
argue that:
·
The entire complaint against them fails due to
the Barton Doctrine;
·
The cause of action for negligence is subject to
demurrer because Defendants owed Plaintiff no duty and because the economic
loss doctrine bars the claim;
·
The cause of action for fraud fails due to lack
of specificity and failure to allege any reasonable reliance on any statement
made by Defendants;
·
The cause of action for interference fails
because Plaintiff has alleged no economic relationship and no economic benefit,
Defendants are not alleged to have known of any such relationship, Defendants’
relationship was with the receiver only, not with Plaintiff, and there was no
interference as the entire sale was blessed by the Court.
Any opposition to the demurrers was
due on or before 1/20/23. The Court has
not received opposition to the demurrers.
e. Barton
Doctrine
Defendants’ primary argument is
that they, as agents of the receiver, cannot be sued absent a court order
permitting a suit against them, which would necessarily have had to be obtained
from Judge Vicencia in 2019. Defendants
rely on Barton v. Barbour, 104 U.S. 126 (1881) and its progeny to support this
position. Specifically, they cite
Ostrowski v. Miller (1964) 226 Cal.App.2d 79, 83-84 to support their position
that a receiver cannot be sued for conduct occurring during the receivership,
and Ariel Preferred Retail Group, LLC v. CW Capital Asset Management, 883
F.Supp.2d 797 (E.D. Mo. 2012) to support the position that this protection
extends to a receiver’s agents and employees.
In Ostrowski, the plaintiff sued a
court-appointed receiver. The Court of
Appeals made clear that a receiver cannot be made a party defendant to the
litigation unless by consent of the court appointing him. In this case, Judge Vicencia appointed the
receiver, and therefore only Judge Vicencia would be able to authorize litigation
against the receiver. Defendants, of
course, are not the receiver; they are the agent and appraiser hired by the
receiver to assist in the sale of the property.
Defendants do not cite California authority applying the doctrine to
them, and instead rely on a Missouri Federal District Court case in this
regard.
The Court is inclined to agree with
the Missouri District Court’s analysis.
The moving defendants would not exist but for the receiver’s hiring of
them. They had no independent
relationship with Plaintiff, and were functioning as agents of the receiver. Thus, any rule requiring a plaintiff to seek
permission from the appointing court in order to sue the receiver would
logically require the same procedure in order to sue the receiver’s agents. The demurrer is sustained without leave to
amend on the ground that Plaintiff failed to seek Judge Vicencia’s permission
to sue the receiver’s agents prior to doing so.
f. Additional
Issues
The Court need not rule on the
remaining objections to the complaint in order to fully dispose of the action
against Defendants. The Court notes,
however, that the additional arguments appear to be well-taken. Plaintiff cannot sue Defendants for
negligence, and Plaintiff and Defendants had no relationship, so Defendants
owed Plaintiff no duty. Plaintiff cannot
sue Defendants for fraud, as Plaintiff failed to articulate any statements made
by Defendants to Plaintiff, and/or how Plaintiff reasonably relied on any such
statements. Plaintiff cannot sue
Defendants for interference with economic relationship, as Plaintiff failed to
allege the existence of any economic relationship, Defendants’ knowledge of the
relationship, and/or Defendants’ intentional acts to interfere with that
relationship.
3. Motions to Strike
Defendants also filed motions to
strike portions of the complaint. The
motions to strike are moot in light of the ruling on the demurrers.
4. Conclusion
Defendants’ demurrers are sustained
without leave to amend.
Defendants are ordered to give
notice.
Parties who intend to submit
on this tentative must send an email to the court at gdcdepts27@lacourt.org indicating intention to submit on the tentative
as directed by the instructions provided on the court website at www.lacourt.org. If
the department does not receive an email indicating the parties are submitting
on the tentative and there are no appearances at the hearing, the motion may be
placed off calendar. If a party
submits on the tentative, the party’s email must include the case number and
must identify the party submitting on the tentative. If any party does not
submit on the tentative, the party should make arrangements to appear remotely
at the hearing on this matter.