Judge: Michael C. Kelley, Case: 19AVCV00582, Date: 2022-09-13 Tentative Ruling
Case Number: 19AVCV00582 Hearing Date: September 13, 2022 Dept: A15
Background
This breach of contract case was initiated on August 12, 2019, by Plaintiff Antanacio Vicente Contreras Sanchez (“Plaintiff”) against Defendants and moving parties Y2118 LLC and Daryl Baskerville (collectively, “Defendants”). Plaintiff alleges that, on or about August 24, 2015, he and Defendants entered into a written contract for Plaintiff to lease with the option to purchase the real property located at “140th Street East, Sun Village, CA 92591” (the “Property”). (First Am. Compl. ¶ 17.) Plaintiff alleges that, despite fully performing the contract, Defendants refused to transfer title to the Property as agreed. (Id., ¶ 24.)
Plaintiff filed the operative First Amended Complaint in propria persona on February 7, 2022. He alleges five causes of action for (1) breach of contract and breach of covenant of good faith and fair dealing, (2) negligent misrepresentation, (3) intentional misrepresentation and fraud, (4) “specific performance,” and (5) quiet title. In addition to Defendants, Plaintiff had also filed this pleading against Branson Snider, Branson Snider LLC, and Erika Esperanza Juarez; but he has since dismissed them, leaving only Defendants Y2118 LLC and Baskerville.
Defendants filed the instant Demurrer to First Amended Complaint on June 24, 2022. Their attorney attests that he emailed Plaintiff on June 2, 2022 to discuss the demurrer, thereby satisfying the meet and confer requirement. Plaintiff did not respond, and has not filed an opposition.
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Analysis
Demurrer— The party against whom a complaint has been filed may object to the pleading, by demurrer, on several grounds, including the ground that the pleading does not state facts sufficient to constitute a cause of action. (Code Civ. Proc. § 430.10, subd. (e).)
“In determining whether or not the complaint is sufficient, as against the demurrer upon the ground that it does not state facts sufficient to constitute a cause of action, the rule is that if, upon a consideration of all the facts stated, it appears that the plaintiff is entitled to any relief at the hands of the court against the defendants, the complaint will be held good . . . .” (Matteson v. Wagoner (1905) 147 Cal. 739, 742.) The plaintiff need only “set forth the essential facts of his case with reasonable precision and with particularity sufficient to acquaint a defendant with the nature, source and extent of his cause of action.” (Youngman v. Nevada Irr. Dist. (1969) 70 Cal.2d 240, 245.)
The demurrer,
admits all material facts that are properly pleaded. Generally, material facts alleged in the complaint are treated as true for the purpose of ruling on the demurrer. [Citation.] Also taken as true are facts that may be implied or inferred from those expressly alleged. [Citations.] . . . . In short, the ruling on a demurrer determines a legal issue on the basis of assumed facts, i.e., those properly alleged in the complaint, regardless of whether they ultimately prove to be true.
(C & H Foods Co. v. Hartford Ins. Co. (1984) 163 Cal.App.3d 1055, 1062.)
Each evidentiary fact that might eventually form part of the plaintiff's proof need not be alleged. (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.) “A demurrer is not concerned with the likelihood that the plaintiffs will prevail, nor even whether they have evidence to support their allegations.” (Gervase v. Superior Court (1995) 31 Cal.App.4th 1218, 1224.)
However, the court need not assume the truth of “contentions, deductions or conclusions of law.” (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.) Nor will courts “close their eyes to situations where a complaint contains allegations of fact inconsistent with attached documents, or allegations contrary to facts which are judicially noticed.” (Code Civ. Proc., § 430.30, subd. (a); Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604.)
Here, Defendants demur to all five causes of action on the grounds that none state sufficient facts to constitute the alleged causes of action.
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First Cause of Action for Breach of Contract and Breach of Covenant of Good Faith and Fair Dealing
To be entitled to damages for breach of contract, a plaintiff must plead and prove (1) a contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) damage to plaintiff. (Walsh v. West Valley Mission Community College Dist. (1998) 66 Cal.App.4th 1532, 1545.) A plaintiff may also assert a cause of action for breach of implied covenant of good faith and fair dealing, when the defendant “unfairly frustrates the agreed common purposes and disappoints the reasonable expectations of the [plaintiff] thereby depriving that party of the benefits of the agreement.” (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1395.)
Here, Defendants argue that Plaintiff “fails to adequately plead that he entered into a contract with Defendants” because he did not attach the contract or provide the verbatim terms. (Defs. Demurrer First Am. Compl. [PDF p. 5].) They also argue that judicially noticeable facts prove that Defendants did not breach their contractual obligations.
The argument that Plaintiff’s complaint fails because he did not provide the verbatim terms of the contract is not well-taken. Defendants clearly know which contract Plaintiff is referring to, since they mount a fact-specific defense to the merits of this claim. Furthermore, the pleading need only provide sufficient information for the responding party to ascertain “whether the contract is written, is oral, or is implied by conduct.” (Code Civ. Proc., § 430.10, subd. (g).) Here, Plaintiff specifically alleged that the contract was written. (First Am. Compl. ¶ 17.)
Additionally, Plaintiff does provide the material provisions of the contract, verbatim, in Paragraph 18: Plaintiff was to pay $200.00 per month to the “Landlord” on the 24th day of each month, beginning on October 24, 2015, and ending on September 24, 2017. (First Am. Compl. ¶ 18.) Plaintiff was to have the “exclusive” option to purchase the Property for $6,000.00, and had the right to exercise this option during the period from “the beginning date of this Lease until AUGUST 24, 2017.” (Ibid.) To exercise the option, Plaintiff needed to pay $400.00 on September 24, 2015, and a remaining $600.00 before September 24, 2017. (Ibid.)
As for performance and breach, Plaintiff alleges he exercised the purchase option “pursuant to the Lease with Purchase Option,” and made the $200.00 monthly payments. (First Am. Compl. ¶ 19.) He alleges that, despite this, in December 2018, he was informed that Defendants had sold the Property to former defendant Erika Juarez. (Id., ¶ 22.) According to Defendants, they indeed sold the Property on July 10, 2018. (Defs. Demurrer First Am. Compl. [PDF p. 14].)
Taking the allegations as true, if Plaintiff had an exclusive option to purchase the Property, and had properly exercised it, then by selling the Property to Juarez after Plaintiff exercised it, Defendants had violated the purchase option. This would indeed be a breach of contract.
However, Plaintiff’s own allegations belie his assertion that he exercised the purchase option “pursuant to” the agreement. (First Am. Compl. ¶ 19.) He alleges that, “In October 2018, [he] met with the landlord/owner to make his October 2018 payment in person.” (Id., ¶ 20.) He also makes allegations about making a November 2018 payment.
Yet he earlier alleged that the “Lease with Purchase Option” ended on September 24, 2017; and that he needed to exercise his purchase option by August 24, 2017, and pay $600.00 by September 24, 2017. (First Am. Compl. ¶ 18.) That he was still making payments in 2018 suggests he was not making payments pursuant to the agreement—the agreement did not call for payments beyond September 24, 2017. This in turn suggests he did not properly exercise the purchase option, as he has alleged conduct that is contrary to its terms. If he did not properly exercise the purchase option, Defendants’ sale of the Property was not a breach.
Therefore, Plaintiff has not alleged the elements of his performance or Defendants’ breach. Defendants’ demurrer to the first cause of action for breach of contract and implied covenant of good faith and fair dealing is SUSTAINED.
As for leave to amend, nothing so far indicates that there is no redeeming explanation for why Plaintiff was still making payments after the lease was supposed to have ended. The allegations in his First Amended Complaint suggest that he did not exercise the purchase option before it expired, but neither Plaintiff nor Defendants have definitively addressed this. Defendants instead argue that it cannot be liable for breach of contract because Juarez now owns title to the Property. This is untrue, as Defendants could still be liable for breaching its promise to give Plaintiff the exclusive right to purchase.
Therefore, Plaintiff is entitled to leave to amend to address this gap in the record.
Second and Third Causes of Action for Negligent Misrepresentation and Intentional Misrepresentation
The elements of actionable fraud are: "(1) a false representation, actual or implied, or the concealment of a matter of fact, material to the transaction, made falsely; (2) knowledge of the falsity, or statements made with such disregard and recklessness that knowledge is inferred; (3) intent to induce another into relying on the representation; (4) reliance by one who has a right to rely; and (5) resulting damage." (Ach v. Finkelstein (1968) 264 Cal.App.2d 667, 674.) A false representation can include “[t]he suggestion, as a fact, of that which is not true, by one who does not believe it to be true,” and a “promise, made without any intention of performing it.” (Civ. Code, § 1710.)
The pleading of fraud is “the last remaining habitat of the common law notion that a complaint should be sufficiently specific that the court can weed out nonmeritorious actions on the basis of the pleadings.” (Committee On Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216–217.) Regardless of the relaxed pleading criteria that are generally applied, “certain tortious injuries demand firm allegations. Vague, conclusory allegations of fraud or falsity may not be rescued by the rule of liberal construction.” (G. D. Searle & Co. v. Superior Court (1975) 49 Cal.App.3d 22, 29.)
Here, Plaintiff alleges several misrepresentations, only some of which are actually misrepresentations: his allegation that Defendants represented that they owned the Property is not a misrepresentation under his own allegations—Plaintiff’s allegations and Defendants’ quitclaim deed show that Defendant Baskerville indeed owned the Property, since he transferred the interest to Juarez under the quitclaim deed.
As for the other alleged misrepresentations, Plaintiff does not plead facts to support his allegation that Defendants did not intend to agree to the lease with purchase option, or that they accepted his purchase option. (First Am. Compl. ¶ 34.) According to Plaintiff’s own allegations, Defendants entered into this agreement; this indicates their intention to agree to it. Though Plaintiff implies that Defendants’ subsequent sale of the Property supports his accusation that Defendants did not intend to honor the purchase option, the Court found that Plaintiff’s allegations did not show he properly exercised the purchase option. The allegations instead suggest that Plaintiff did not abide by the terms of the purchase option himself. Therefore, the fact of Defendants’ sale does not indicate anything about Defendants’ intent to honor a purchase option that was never, under these allegations, invoked.
Thus, Plaintiff’s factual allegations do not show Defendants had intended to induce Plaintiff into relying on the representations made in the lease. Under the allegations, it is reasonable to infer that Defendants intended to abide by the lease, but some conditions precedent (Plaintiff’s proper exercise of the purchase option) never materialized. Therefore, Defendants’ demurrer to the second and third causes of action are SUSTAINED.
However, there is nothing so far to suggest Plaintiff cannot plead these causes of action. Therefore, Plaintiff shall be granted leave to amend.
Fourth Cause of Action for Specific Performance
The Court agrees with Defendants that “specific performance” not a cause of action: “specific performance and injunctive relief are equitable remedies and not causes of action for injuries.” (Wong v. Jing (2010) 189 Cal.App.4th 1354, 1361, fn. 2.) Therefore, Defendants’ demurrer to the fourth cause of action for specific performance is SUSTAINED without leave to amend.
Fifth Cause of Action for Quiet Title
Actions to quiet title are governed by [Code of Civil Procedure] section 761.010 et seq. The quiet title plaintiff must file a verified complaint including a description of the property, the basis for the plaintiff's claim of title, the adverse claims the plaintiff seeks to adjudicate, the date as of which the plaintiff seeks to adjudicate those claims, and a prayer for the determination of the plaintiff's title against the adverse claims. (§ 761.020.) A quiet title plaintiff must name as defendants “the persons having adverse claims that are of record or known to the plaintiff or reasonably apparent from an inspection of the property.” (§ 762.060, subd. (b).)
(Deutsche Bank National Trust Co. v. Pyle (2017) 13 Cal.App.5th 513, 524.)
Here, Plaintiff’s First Amended Complaint is indeed verified, and includes a description of the Property in Paragraph 17. The Court knows this is the correct property description because it is the same one contained in Defendants’ quitclaim deed.
His claim, however, fails because he seeks to adjudicate Juarez’s adverse claim. (First Am. Compl. ¶ 74.) Juarez was dismissed from this action on March 2, 2021, pursuant to Plaintiff’s oral motion. Under Plaintiff’s factual allegations, Defendants do not have any adverse claims to the Property, since Plaintiff agrees they transferred title to Juarez. (Id., ¶ 22.)
Furthermore, as Plaintiff’s allegations do not support a finding that Defendants wrongfully breached the purchase option, Plaintiff has not alleged a sufficient basis for his claim of title.
Therefore, Defendants’ demurrer to the fifth cause of action for quiet title is SUSTAINED without leave to amend as to Defendants, because they do not own title to the Property. However, since Juarez was dismissed from this action without prejudice, Plaintiff may amend his complaint to properly re-allege this cause of action against her.
Conclusion
Defendants’ Demurrer is SUSTAINED as to all five causes of action, with leave to amend, with exception to the fifth cause of action for quiet title, which cannot be amended as to Defendants Y2118 LLC and Baskerville.