Judge Matthew C. Braner, Case Number: 37-2022-00017985-CU-CO-CTL, Date: 2024-05-24 Tentative Ruling

Judge: Matthew C. Braner, Case: 37-2022-00017985-CU-CO-CTL, Date: 2024-05-24 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - May 23, 2024

05/24/2024 09:00:00 AM C-60 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Matthew C. Braner

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Civil - Unlimited Contract - Other Motion Hearing (Civil) 37-2022-00017985-CU-CO-CTL PETIGARA VS KB HOME COASTAL INC [IMAGED] CAUSAL DOCUMENT/DATE FILED:

Defendant KB Home Coastal Inc.'s demurrer to the second amended complaint is SUSTAINED.

Defendant's motion to strike is GRANTED.

Preliminarily, although Plaintiffs Vishal Petigara and Rasheda Ahmed served the SAC on Defendant, it appears they did not file it. Plaintiffs are instructed to do so as soon as possible.

A demurrer shall be sustained if the complaint 'does not state facts sufficient to constitute a cause of action.' (Code Civ. Proc., � 430.10(e).) To test the sufficiency of a cause of action, the court treats as true 'all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.' (Centinela Freeman Emergency Medical Associates v. Health Net of California, Inc. (2016) 1 Cal.5th 994, 1010.) The court may also consider matters that have been judicially noticed. (Id.) The court shall give the complaint a 'reasonable interpretation, reading it as a whole and its parts in their context.' (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) Defendant demurs to the second, third, and fourth causes of action in the second amended complaint, for breach of the implied covenant of good faith and fair dealing, breach of contract (specific performance), and breach of the purchase agreement, respectively. Defendant contends Plaintiffs have failed to cure the deficiency upon which the court based its decision to sustain Defendant's demurrer to the first amended complaint in connection with these contract-based claims. With respect to the FAC, the court found Plaintiffs had failed to adequately plead facts showing compliance with section 7.2 of the purchase contract, and thereby had failed to sufficiently plead breach of contract. In the SAC, Plaintiffs have again failed to adequately plead facts showing compliance with section 7.2. Plaintiff have thus failed to adequately allege they did all, or substantially all, of the significant things the contract required them to do. (CACI 303.) Section 7.2 specifies that if a party receives a written Default Notice (pursuant to section 7.1) and disputes they are in default, the party 'must send written notice and demand to arbitrate (a 'Dispute Notice')' to the other party and to the Escrow Holder. (SAC, Ex. 1 [Purchase Agreement and Escrow Instructions], at p. 7.) In capitalized and bolded font, section 7.2 requires that the Dispute Notice 'MUST BE RECEIVED BY ESCROW HOLDER AND THE NON-DEFAULTING PARTY WITHIN TWENTY (20) DAYS AFTER RECEIPT OF THE DEFAULT NOTICE.' In the event the Dispute Notice is not received by both the Non-Defaulting Party and the Escrow Holder within the twenty day period, 'then the Defaulting Party shall have waived its right to dispute the claims in the Default Notice and the Non-Defaulting Party shall be entitled to the remedy it elected in the default notice.' Calendar No.: Event ID: TENTATIVE RULINGS

3090433 14 CASE NUMBER: CASE TITLE: PETIGARA VS KB HOME COASTAL INC [IMAGED] 37-2022-00017985-CU-CO-CTL From the FAC to the SAC, the only material change is the following allegation stated at paragraphs 36, 56, 64, and 73: 'Plaintiffs timely and properly disputed all Notice of Default and Termination, required of them to maintain standing to sue in the Superior Court of San Diego County, notifying KB that they disputed the fact that they were in default under the Purchase Agreement.' This allegation does not cure the deficiency. The first half ending in 'County' is simply a legal conclusion; as such, the court need not consider it. (Centinela Freeman Emergency Medical Associates v. Health Net of California, Inc., supra, 1 Cal.5th at p. 1010.) The second half is wholly insufficient, given the specificity of section 7.2 as to both the manner (written notice that includes an arbitration demand) and timing (within 20 days) of the Dispute Notice. Moreover, Plaintiffs do not allege in even a conclusory manner that any kind of notice (whether written or otherwise) was sent to First American Title Company, the Escrow Holder. (SAC, Ex. 1 [Purchase Agreement and Escrow Instructions-Transaction Summary], at p. 1.) Accordingly, the demurrer is sustained.

The court is inclined to sustain the demurrer without leave to amend. Plaintiffs were already afforded an opportunity to add what should be straightforward factual allegations to support compliance with section 7.2, and failed to do so. This failure strongly suggests Plaintiffs cannot in good faith allege the requisite facts to overcome the above pleading deficiency. The court will hear from the parties on this issue.

As to the motion to strike the claim for punitive damages, Plaintiffs have elected to withdraw the claim by stipulating to strike paragraph 9 in the SAC. As such, Defendant's motion is granted.

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3090433 14