Judge: Mark H. Epstein, Case: 21SMCV02010, Date: 2023-02-28 Tentative Ruling

Case Number: 21SMCV02010    Hearing Date: February 28, 2023    Dept: R

The demurrer to the fourth cause of action is OVERRULED.  The motion to strike is GRANTED as to the image but is in all other respects DENIED.

Plaintiff Michael Simkin (“plaintiff”) filed this construction defect action against defendants Ofer Dayan, dba D&C Construction Co., and Dayan Industries Inc. (collectively “defendants”).  According to the operative Second Amended Complaint (“SAC”), on January 15, 2012, plaintiff orally agreed to hire defendants to act as the general contractor for construction work to remodel a property located in Los Angeles.  (SAC, ¶12.)  The scope of work included strengthening the foundation, adding a second floor, landscaping, and other things.  (Ibid.)  Defendants allegedly did not provide plaintiff with a written contract, and Dayan purportedly told plaintiff that he was licensed and experienced and would just ask for payments to complete the project as needed.  (Id. at ¶13.)  Plaintiff states that defendants’ work on the project resulted in payments of over $900,000 to defendants.  A certificate of occupancy for the project was issued on May 8, 2015.  (Id. at ¶14.)  Plaintiff claims that around April 2018, he noticed that a window was not closing properly and asked Dayan to have it fixed.  (Id. at ¶15.)  Dayan purportedly told plaintiff not to worry and to wait, but that if the problem persisted he would send out a window installer.  (Ibid.) Plaintiff asserts a window installer eventually came to adjust the window, but the window again did not close properly and hairline cracks appeared on the walls near the windows in June 2020.  (Ibid.) Dayan allegedly brushed off the issue as ordinary settling but said that if it became worse he would send someone to fix the issues. (Ibid.)

Plaintiff contends there were other required repairs that Dayan delayed in addressing.  Plaintiff claims that Dayan would always assure plaintiff that the house was fine and the repairs could wait.  (SAC, ¶¶16-17.)  Plaintiff continuously voiced his concerns regarding the foundation and other issues, but relied on Dayan’s statement that there was no problem with the foundation.  (Id. at ¶16.)  Plaintiff allegedly asked Dayan to come and take a look but Dayan did not and dragged his feet on this issue.  (Id. at ¶¶17-18.)  Plaintiff claims that Dayan eventually came to inspect the property and review the issues in November 2020.  (Id. at ¶19.)  Dayan again insisted that there were no foundation issues.  (Ibid.)  Plaintiff asserts that Dayan later stated he did not know if the foundation was the issue but told plaintiff to sell the house.  (Ibid.)  Plaintiff claims Dayan made these comments to gaslight him and to run out the statute of limitations.  (Id. at ¶20.)

Eventually, Dayan allegedly sent soil and structural engineers to inspect the property in December 2020 and January 2021, respectively.  (SAC, ¶21-22.)  Plaintiff asserts that the soil engineer stated that the problems with the patio, which had dropped several inches, were due to improper compaction and Dayan would need to fix that.  (Id. at ¶21.)  The structural engineer for the project came to inspect the site but simply deferred to the soil engineer’s opinion.  (Id. at ¶22)  Plaintiff states he was confused by everyone’s failure to determine the cause or corrective measures.  (Ibid.)

Plaintiff states that later in January 2021, he independently hired a contractor, soil engineer, and structural engineer to inspect the property, and they discovered that defendants defectively performed work on the property.  (SAC, ¶23.)  Plaintiff contends these are latent defects that involve the 10-year statute of repose codified in Code of Civil Procedure section 337.15.  (Id. at ¶¶24-25.)  Dayan told plaintiff he would not make any further repairs.  (Id. at ¶26.)

Plaintiff asserts the following causes of action against defendants: (1) breach of verbal contract; (2) construction defect—negligence; (3) breach of implied warranty; and (4) fraud.  Currently before the court is defendants’ demurrer and motion to strike to the SAC.  Plaintiff opposes. 

First, the demurrer is timely.  Although it was set for more than 35 days after filing, that was apparently due to an agreement among the parties.  Even were that not so, the court would exercise its discretion to consider the matter on its merits.

Defendants demur to the fourth cause of action for fraud on the grounds of failure to state sufficient facts. (See Code Civ. Proc., § 430.10, subd. (e).)  Defendants assert that plaintiff simply repeated the breach of contract allegations as fraud and has not adequately alleged the element of no intent to perform. Additionally, defendants argue that the claimed misrepresentations are puffery and opinion.  Defendants contend that failure to perform an agreement cannot support the element of intent not to perform promise.  They further assert that plaintiff’s statements regarding intent to induce reliance are conclusory, as are the allegations of harm.  The court disagrees.  “An action for promissory fraud may lie where a defendant fraudulently induces the plaintiff to enter into a contract.  (Chelini v. Nieri (1948) 32 Cal.2d 480, 487.)”  (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638, parallel citations omitted.)  “Thus, in a promissory fraud action, to sufficiently alleges defendant made a misrepresentation, the complaint must allege (1) the defendant made a representation of intent to perform some future action, i.e., the defendant made a promise, and (2) the defendant did not really have that intent at the time that the promise was made, i.e., the promise was false.  (Id. at 639.)”  (Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 1060.)

This claim does not merely reiterate the breach of contract claim.  That claim is predicated on the breach of the construction agreement.  (SAC, ¶¶33-34.)  The fraud cause of action is predicated on the misrepresentations Dayan made that preceded the agreement and induced plaintiff into it as well as later statements.  (Id. at ¶¶49-56.)  Plaintiff properly pleads factual misrepresentations as well.  “ ‘It is hornbook law that an actionable misrepresentation must be made about past or existing facts; statements regarding future events are merely deemed opinions.’  (San Francisco Design Center Associates v. Portman Companies (1995) 41 Cal.App.4th 29, 43-44; see Apollo Capital, supra, 158 Cal.App.4th at pp. 241, 244 [‘the statement that eNucleus would be cash flow positive at the end of the first quarter 2000’ is ‘nonactionable as opinion or prediction’]; Nibbi Brothers Inc. v. Home Federal Savings & Loan Assn. (1988) 205 Cal.App.3d 1415, 1423 [‘In tort law, a representation ordinarily will give rise to a cause of action for fraud or deceit only if it is a representation of fact rather than opinion. (Civ.Code, §§ 1572, 1710)’].)”  (Public Employees' Retirement System v. Moody's Investors Service, Inc. (2014) 226 Cal.App.4th 643, 662, parallel citations omitted.)  “If defendants' assertion of safety is merely a statement of opinion—mere ‘puffing’—they cannot be held liable for its falsity.  (Cf. Willson v. Municipal Bond Co. (1936) 7 Cal.2d 144, 150; Pacesetter Homes, Inc. v. Brodkin (1970) 5 Cal.App.3d 206, 211—212.)”  (Hauter v. Zogarts (1975) 14 Cal.3d 104, 111, parallel citations omitted.)  But the allegations here are not mere puffery, at least as a pleading matter.

Another issue with this argument is that it fails to appreciate that plaintiff’s claim is partly predicated on the concealment of material facts.  (SAC, ¶52 [“Defendants, via Defendant Dayan, further concealed from Plaintiff that Defendants’ construction services would not be provided in full compliance with California licensing laws”].)  “Ordinarily, a general demurrer does not lie as to a portion of a cause of action, and if any part of a cause of action is properly pleaded, the demurrer will be overruled.  (Campbell v. Genshlea (1919) 180 Cal. 213, 217.)”  (Fire Ins. Exchange v. Superior Court (2004) 116 Cal.App.4th 446, 452, parallel citations omitted.)  Aside from that, plaintiff adequately alleges that Dayan made representations of fact.  For example, he promised he would “only charge his cost.” (SAC, ¶49.)  He allegedly did not.

As for intent, plaintiff pleads hasty repudiation and false promises of future performance as a basis for intent, which is enough for the pleading stage.  Plaintiff will have to prove that to recover, but need not prove it to survive demurrer.  The demurrer is OVERRULED.

Defendants move to strike the fourth cause of action for fraud, the request for punitive damages, and an image located on page 6, lines 7-13, of the SAC.  The motion is DENIED as to the fraud cause of action and punitive damages.  The fraud claim survived the demurrer and a motion to strike is not the proper vehicle to attack the sufficiency of a claim.  The request for punitive damages is properly pled in light of the fraud claim.

The image is a separate story.  The court does not understand how the image is at all material to the issues in this case.  In his opposition, plaintiff argues that the image, sent on Father’s Day in June 2020, shows a “a close, confidential relationship that as such induces the plaintiff to place confidence in Defendant’s integrity, plaintiff’s reliance on Defendant’s statements justifies plaintiff’s entitlement to relief based on fraud.  (See (5 Witkin, Summary of California Law, 11th Torts § 895 (2022), citing to, e.g., Bank of America v. Sanchez (1934) 3 C.A.2d 238, 242).  The photo shows that Defendant Dayan and Plaintiff were close friends, close enough for Defendant to send Plaintiff a picture that he now deems offensive and inappropriate to Plaintiff on Father’s Day.”  (MtS Opp., p. 5:11-17.)  The photo does nothing of the sort.  It is not explained in the SAC, nor is the photo a proper substitute for words.  There are paragraphs of allegations on reliance and this picture adds nothing to them.  It is an inappropriate photograph that does not belong in a pleading where there is no indication of relevance (i.e., sexual harassment allegations, etc.).  The motion is GRANTED as to the photograph.

Plaintiff has 10 days to re-file the complaint without the photo.  Defendant has 10 days thereafter to answer.  Defendant may not submit a pleading motion given that the only change is the photo’s deletion.