Judge: Melissa R. Mccormick, Case: Sanchez v. Gaw, Date: 2023-08-17 Tentative Ruling

Defendants Patrick Gaw and Stephanie Ng’s Demurrer to First Amended Complaint

Defendants Patrick Gaw and Stephanie Ng demur to the fourteenth cause of action for fraud in plaintiffs David Sanchez, Amanda Sanchez, and Alyssa Sanchez’s first amended complaint.  Plaintiffs filed an opposition to the demurrer, in which plaintiffs assert defendants served the demurrer papers late.  Plaintiffs state in their opposition that they waive the late service issue.  Opp. at 1:18.  For the following reasons, defendants’ demurrer is sustained with leave to amend.

In ruling on a demurrer, a court must accept as true all allegations of fact contained in the complaint.  Blank v. Kirwan (1985) 39 Cal.3d 311, 318.  A demurrer challenges only the legal sufficiency of the affected pleading, not the truth of the factual allegations in the pleading or the pleader’s ability to prove those allegations.  Cundiff v. GTE Cal., Inc. (2002) 101 Cal.App.4th 1395, 1404-05.  Questions of fact cannot be decided on demurrer.  Berryman v. Merit Prop. Mgmt., Inc. (2007) 152 Cal.App.4th 1544, 1556.  Because a demurrer tests only the sufficiency of the complaint, a court will not consider facts that have not been alleged in the complaint unless they may be reasonably inferred from the matters alleged or are proper subjects of judicial notice.  Hall v. Great W. Bank (1991) 231 Cal.App.3d 713, 718 n.7.

The elements of fraud by misrepresentation are:  (1) a misrepresentation; (2) knowledge of its falsity; (3) intent to induce reliance on the misrepresentation; (4) justifiable reliance on the misrepresentation; and (5) resulting damages.  Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.  Each element of an intentional misrepresentation cause of action must be pleaded with specificity.  Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1166.  General and conclusory allegations do not suffice.  Lazar, 12 Cal.4th at 645.  The particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered.  Id.

Plaintiffs’ fraud cause of action incorporates the preceding paragraphs of the complaint, and alleges:  “Defendants had ownership, and/or control of the subject premises at the time of Plaintiffs[‘] injuries.  Prior to Plaintiffs renting the subject premises, Defendants knew, or should have known, about the dangerous conditions within the subject premises and that exposure to them was, and is, a health hazard that could contribute to Plaintiff’s injuries.  Defendants knew of the presence of water leaks and mold prior to the Plaintiffs executing the lease agreement and misrepresented to the Plaintiffs that said water leaks and mold did not exist.  This was a lie.  Despite this knowledge, Defendants knowingly told the Plaintiffs the subject premises were free of said mold and water leaks.  These statements were knowingly false and were made with the intention to deceive and/or induce reliance, to which did induce justifiable reliance, resulting in damages to Plaintiffs.  The Defendants’ conduct was willful [and] malicious and shocks the conscience of any reasonable person.  Said conduct was despicable and caused significant damages to the Plaintiffs, to which will be proven at trial.”  First Amended Complaint ¶ 92. 

The court sustained defendants’ prior demurrer to this cause of action because, while this claim appeared to allege defendants made misrepresentations to plaintiffs about the condition of the property to induce plaintiffs to rent it, the complaint contained no allegations about any statements defendants made before plaintiffs rented the property, much less statements plaintiffs contended were not true.  See 6/8/23 Order.

In their first amended complaint, plaintiffs have added allegations that defendants knew about water leaks and mold before plaintiffs executed the lease and misrepresented to plaintiffs that water leaks and mold did not exist, which plaintiffs allege “was a lie.”  FAC ¶ 92; see also FAC ¶ 12 (“Defendants verbally and in writing told the Plaintiffs there was no mold and no water leaks in the subject premises. . . .  However, the Defendant’s [sic] answer was a lie.  The Defendants intentionally and with malice misrepresented to the Plaintiffs, prior to signing the lease agreement, there were no water leaks and[/]or mold in the subject premises.”). 

These new allegations do not remedy the deficiencies in plaintiffs’ fraud claim.  The new allegations are not sufficiently specific to state a fraud claim against defendants.  As noted above and in the court’s June 8, 2023 order, general and conclusory allegations do not suffice to state a fraud claim.  Lazar, 12 Cal.4th at 645.  The particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered.  Id.  Plaintiffs’ new allegations do not include facts showing how, when, where, to whom, and by what means the alleged representations were tendered.  Plaintiffs also variously allege “defendants” made misrepresentations, and “defendant” made misrepresentations.  Plaintiffs must allege which defendant said what to whom, as well as when, where, and by what means.  Defendants’ demurrer to the fourteenth cause of action is sustained with leave to amend.

Should plaintiffs desire to file an amended complaint that addresses the issues in this ruling, plaintiffs must file and serve it by August 28, 2023.

Defendants’ request for judicial notice is denied.  It is not necessary to seek judicial notice of documents in the court file for this case.

Defendants to give notice.

Defendants Patrick Gaw and Stephanie Ng’s Motion to Strike First Amended Complaint

Defendants Patrick Gaw and Stephanie Ng move to strike the punitive damages allegations and prayer from plaintiffs David Sanchez, Amanda Sanchez, and Alyssa Sanchez’s first amended complaint.  For the following reasons, defendants’ motion is granted in part and denied in part.

To properly allege entitlement to punitive damages, there must be circumstances of oppression, fraud or malice, and facts must be alleged in the pleading to support such a claim.  Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 166.  “To support an award of punitive damages on the basis of conscious disregard of the safety of others, a plaintiff ‘must establish that the defendant was aware of the probable dangerous consequences of his conduct, and that he willfully and deliberately failed to avoid those consequences.’”  Penner v. Falk (9184) 153 Cal.App.3d 858, 867.

Plaintiffs’ conclusory punitive damages allegations do not meet this standard, and plaintiffs’ factual allegations do not describe circumstances of oppression, fraud or malice, or willful and deliberate failure by defendants to avoid the alleged consequences of their conduct.  Defendants’ motion to strike paragraphs 68 (15:26-16:1), 77 (17:1-5) and 98 (19:23-20:2) and Prayer for Relief paragraph C (18:10-11) is granted with leave to amend.  Defendants’ motion to strike paragraph 92 (18:25-19:7) is denied as moot light of the court’s concurrent ruling on defendants’ demurrer. 

Should plaintiffs desire to file an amended complaint that addresses the issues in this ruling, plaintiffs must file and serve it by August 28, 2023.

Defendants’ request for judicial notice is denied.  It is not necessary to seek judicial notice of documents in the court file for this case.

Defendants to give notice.