Judge: Mark H. Epstein, Case: 22SMCV02059, Date: 2023-11-03 Tentative Ruling

Case Number: 22SMCV02059    Hearing Date: November 17, 2023    Dept: I

The demurrer is OVERRULED.  Defendant has 10 days to answer.

This is a dispute in which a tenant is suing a landlord.  The debate is about the return of the security deposit.  Plaintiff contends that he wanted to do a walkthrough before vacating the premises, as he is legally entitled to do.  No formal walk-through occurred (although defendant Welborn allegedly happened by and said that the unit “looked good”) and the landlord withheld the security deposit claiming that there was damage to the apartment.  Plaintiff says that a neighbor claims that this was the landlord’s pattern: not to hold a walk-through but to withhold the security deposit.  On that basis, plaintiff alleges fraud and the landlord demurs.

It is plaintiff’s burden to establish a false representation by the landlord upon which plaintiff reasonably relied to his detriment.  The allegation must be specific.  That is, plaintiff must allege what it is that the landlord said.  The operative paragraph is paragraph 38 of the second amended complaint.  In it, plaintiff claims that the representation that the security deposit would be refunded to plaintiff if plaintiff complied with the lease was false.  The court agrees that the promise in the lease regarding the return of the security deposit is specific, although the opposition seems to be the first time plaintiff articulated the lease as containing the false promise.  So, essentially, the case is not traditional fraud, but fraud in the inducement, or promissory fraud.  Such is certainly a flavor of fraud, although not the one that initially appeared to be pled.  Normally, the court would be inclined to sustain the demurrer with leave to amend.  But the court does not believe that doing so will help move the case forward in any meaningful way. 

Of course, the mere fact that the promise was breached is not necessarily conclusive proof of fraud.  However, plaintiff does a bit more.  Plaintiff alleges that he specifically requested a walk-through so that he could correct any problems before moving out.  Defendants acknowledged the request, but failed to schedule the walk-through or inform plaintiff that he had a right to a walk-through.  (SAC par. 13.)  Plaintiff also alleges that this is defendant’s regular practice: to avoid a walk-through so that the security deposit can be kept rather than returned.  (SAC par. 14.)  Plaintiff also alleges that just as plaintiff was leaving on February 10, 2022, Welborn actually happened by and said that the condition “looked good” and smelled “fresh,” which is at least arguably inconsistent with defendant’s later decision not to return the deposit.  At the same time, plaintiff asked defendant if there was anything else plaintiff ought to do and defendant did not identify anything.  (SAC par. 16.)  While hardly overpowering, it is enough to lead to the inference that Welborn had no intention at the time of signing the lease of returning the security deposit no matter how good the apartment’s condition was.  And that is promissory fraud.  Whether it is enough is better tested by way of summary judgment or trial.