Judge: Michael E. Whitaker, Case: 24SMCV01930, Date: 2024-08-01 Tentative Ruling

Case Number: 24SMCV01930    Hearing Date: August 1, 2024    Dept: 207

TENTATIVE RULING

MOTIONS

This case arises over a dispute concerning the sale of real estate to Plaintiffs Joel G. Weinberg, Trustee of the JW Family Trust dated October 26, 2015, as Amended on August 31, 2016; and Jill M. Weinberg, Trustee of the JW Family Trust dated October 26, 2015, as Amended on August 31, 2016 (“Plaintiffs”).

On April 24, 2024, Plaintiffs filed suit against Defendants Todd C. Miller; Kelley Miller (together, “the Millers”); Victor Chicas an individual and doing business as VD Contractor and VD Contractor Locksmith; Luis Vasquez; and Alberto Ruiz (together, “Defendants”), alleging six causes of action for (1) Fraud/Deceit (misrepresentation); (2) Fraud/Deceit (concealment); (3) Negligent Misrepresentation; (4) Negligence; (5) Violation of Civil Code Section 2079; and (6) Intentional Infliction of Emotional Distress.   

The Millers, who were the seller’s real estate agents on the transaction, demur to the sixth cause of action on the grounds that it fails to state facts sufficient to constitute a cause of action and is uncertain, pursuant to Code of Civil Procedure section 430.10, subdivisions (e) and (f), respectively.  The Millers also move to strike the requests for punitive damages, emotional distress damages, and attorneys’ fees.

Plaintiffs oppose both motions.

ANALYSIS

1.     DEMURRER

“It is black letter law that a demurrer tests the legal sufficiency of the allegations in a complaint.”  (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.)  In testing the sufficiency of a cause of action, a court accepts “[a]s true all material facts properly pled and matters which may be judicially noticed but disregard contentions, deductions or conclusions of fact or law.  [A court also gives] the complaint a reasonable interpretation, reading it as a whole and its parts in their context.”  (290 Division (EAT), LLC v. City & County of San Francisco (2022) 86 Cal.App.5th 439, 450 [cleaned up]; Hacker v. Homeward Residential, Inc. (2018) 26 Cal.App.5th 270, 280 [“in considering the merits of a demurrer, however, “the facts alleged in the pleading are deemed to be true, however improbable they may be”].)

Further, in ruling on a demurrer, a court must “liberally construe” the allegations of the complaint “with a view to substantial justice between the parties.”  (See Code Civ. Proc., § 452.)  “This rule of liberal construction means that the reviewing court draws inferences favorable to the plaintiff, not the defendant.”  (Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1238.)  

In summary, “[d]etermining whether the complaint is sufficient as against the demurrer on the ground that it does not state facts sufficient to constitute a cause of action, the rule is that if on consideration of all the facts stated it appears the plaintiff is entitled to any relief at the hands of the court against the defendants the complaint will be held good although the facts may not be clearly stated, or may be intermingled with a statement of other facts irrelevant to the cause of action shown, or although the plaintiff may demand relief to which he is not entitled under the facts alleged.”  (Gressley v. Williams (1961) 193 Cal.App.2d 636, 639.)

A.    UNCERTAINTY

“[D]emurrers for uncertainty are disfavored.”  (Lickiss v. Financial Industry Regulatory Authority (2012) 208 Cal.App.4th 1125, 1135.)  A demurrer for uncertainty will be sustained only where the pleading is so bad that the responding party cannot reasonably respond - i.e., he or she cannot reasonably determine what issues must be admitted or denied, or what claims are directed against him or her.  (Khoury v. Maly’s of California (1993) 14 Cal.App.4th 612, 616.)  Where a demurrer is made upon the ground of uncertainty, the demurrer must distinctly specify exactly how or why the pleading is uncertain, and where such uncertainty appears by reference to page and line numbers.  (See Fenton v. Groveland Comm. Services Dist. (1982) 135 Cal.App.3d 797, 809.) 

Although the Millers purport to demur to the sixth cause of action on the ground of uncertainty, the Millers do not make any substantive arguments in this regard.  Ultimately, the Millers do not demonstrate that any portions of the Complaint are so bad that they cannot reasonably discern what issues must be admitted or denied, or what claims are directed against them.  Therefore, the Court declines to sustain the Millers’ demurrer on the basis of uncertainty. 

B.    FAILURE TO STATE A CAUSE OF ACTION

                                                         i.          Sixth Cause of Action – Intentional Infliction of Emotional Distress

To prevail on the Intentional Infliction of Emotional Distress (“IIED”) cause of action, a plaintiff must prove: “(1) extreme and outrageous conduct by the defendant with the intention of causing, or reckless disregard of the probability of causing, emotional distress; (2) the plaintiff’s suffering severe or extreme emotional distress; and (3) actual and proximate causation of the emotional distress by the defendant’s outrageous conduct.” (Hughes v. Pair (2009) 46 Cal.4th 1035, 1050-1051.) A defendant’s conduct is outrageous when “it is so extreme as to exceed all bounds of that usually tolerated in a civilized community.” (Ibid. [cleaned up].)  Further, the defendant’s conduct must be “intended to inflict injury or engaged in with the realization that injury will result.” (Id. at p. 1051 [cleaned up].)

The Complaint alleges:

82. Plaintiffs allege that Defendants pursued a common course of conduct, acted in concert and conspired with one another, and aided and abetted one another concerning the Property.

83. Plaintiffs allege that the conduct of Defendants was extreme and outrageous in concealing:

• substantial and extensive mold infestation throughout the Property;

• mold at the Property with new and/or repaired drywall that was painted;

 • water damage at the Property with new and/or repaired drywall that was painted;

• wood beams below the balcony that showed extensive rot and degradation;

• roof had been not been repaired to prevent water intrusion;

• side balcony had been not been repaired to prevent water intrusion.

84. Plaintiffs allege that the conduct of Defendants was extreme and outrageous in asserting:

• water-damaged material at the Property had been removed;

• likely some mold at the Property that was removed;

• leaks at the Property had been repaired;

• roof repaired and/or resurfaced to fix roof leaks;

• side balcony bad been waterproofed;

• water intrusion into house was due to side balcony sliding door.

85. Plaintiffs allege that Defendants intended to cause Plaintiffs emotional distress and/or Defendants acted with reckless disregard of the probability that Plaintiffs would suffer emotional distress. Plaintiffs are the purchasers of the Property, and purchased the Property so they could have additional space for their two young children. Plaintiffs would not put their children into the Property knowing that it was infested with mold. Plaintiffs allege the actions and/or conduct of Defendants was directed to Plaintiffs.

86. As a proximate result of actions and/or conduct of Defendants, Plaintiffs have been suffered severe emotional distress.

87. As a proximate result of actions, conduct, and/or omissions of Defendants, Plaintiffs have been damaged in an amount according to proof but no less than $360,000, with interest at the legal rate per annum through judgment.

88. The actions and conduct of Defendants, inclusive, were oppressive, malicious, and fraudulent, justifying an award of punitive damages in an amount according to proof.

(Complaint at ¶¶ 82-88.) 

Plaintiff’s allegations that the Millers actively concealed extensive mold infestation, water damage, and rot throughout the property by covering it with new drywall and paint suffice to allege extreme and outrageous conduct.

2.     MOTION TO STRIKE

Any party, within the time allowed to respond to a pleading, may serve and file a motion to strike the whole pleading or any part thereof.  (Code Civ. Proc., § 435, subd. (b)(1); Cal. Rules of Court, rule 3.1322, subd. (b).)  On a motion to strike, the court may: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court.  (Code Civ. Proc., § 436, subd. (a)-(b); Stafford v. Shultz (1954) 42 Cal.2d 767, 782.) 

Here, the Millers move to strike Plaintiffs’ requests for punitive damages, emotional distress damages, and attorneys’ fees.

Punitive Damages

In ruling on a motion to strike punitive damages, “judges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth.”  (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.)  To state a prima facie claim for punitive damages, a plaintiff must allege the elements set forth in the punitive damages statute, Civil Code section 3294.  (College Hosp., Inc. v. Superior Court (1994) 8 Cal.4th 704, 721.)  Per Civil Code section 3294, a plaintiff must allege that the defendant has been guilty of oppression, fraud, or malice.  (Civ. Code, § 3294, subd. (a).)   As set forth in the Civil Code,

(1) “Malice” means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.  (2) “Oppression” means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights.  (3) “Fraud” means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.

(Civ. Code, § 3294, subd. (c)(1)-(3), emphasis added.) 

Further, a plaintiff must assert facts with specificity to support a conclusion that a defendant acted with oppression, fraud or malice.  To wit, there is a heightened pleading requirement regarding a claim for punitive damages.  (See Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1041-1042.)  “When nondeliberate injury is charged, allegations that the defendant’s conduct was wrongful, willful, wanton, reckless or unlawful do not support a claim for exemplary damages; such allegations do not charge malice.  When a defendant must produce evidence in defense of an exemplary damage claim, fairness demands that he receive adequate notice of the kind of conduct charged against him.” (G. D. Searle & Co. v. Superior Court (1975) 49 Cal.App.3d 22, 29 [cleaned up].)  In Anschutz Entertainment Group, Inc. v. Snepp, the Court of Appeal noted that the plaintiffs’ assertions related to their claim for punitive damages were “insufficient to meet the specific pleading requirement.”  (Anschutz Entertainment Group, Inc. v. Snepp (2009) 171 Cal.App.4th 598, 643 [plaintiffs alleged “the conduct of Defendants was intentional, and done willfully, maliciously, with ill will towards Plaintiffs, and with conscious disregard for Plaintiff's rights. Plaintiff's injuries were exacerbated by the malicious conduct of Defendants. Defendants' conduct justifies an award of exemplary and punitive damages”]; see also Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 166 [“The mere allegation an intentional tort was committed is not sufficient to warrant an award of punitive damages.  Not only must there be circumstances of oppression, fraud, or malice, but facts must be alleged in the pleading to support such a claim”].) 

Here, the Millers contend that the allegations are too conclusory to support a claim for punitive damages. 

The Complaint alleges:

·       The March 4, 2023 Seller Property Questionnaire (“SPQ”) provided by the Millers to Plaintiffs refers to “roof & balcony leaks caused interior damage and mold – leaks repaired and damaged drywall removed, patched, and painted.”  (Complaint ¶ 22.)

·       The Millers’ April 6, 2023 Agent Visual Inspection Disclosure (“AVID”) “suggests that water intrusion related issues to the Property had been taken care [of]”  (Complaint ¶ 22.)

·       The January 29, 2023 remediation proposal from handyman Chicas is addressed to Mr. Miller.  (Complaint ¶ 22.)

·       Therefore, “the Millers must have known about the condition of the Property and of the ‘remediation’ work that was done.”  (Complaint ¶ 22.)

·       After Plaintiffs acquired the property, a neighbor told them “that the person involved with staging the Property for sale, who worked for Seller and Seller’s agent, had to leave the Property because she was very sensitive to irritants and had a negative reaction to what she believed was mold in the Property.”  (Complaint ¶ 26.)

·       Plaintiffs subsequently obtained a Mold Report and Lab Report, which indicated, “this was not an isolated instance of mold; there was mold throughout the entire house including in the Plaintiffs’ daughters’ bedroom and the children’s bathroom.”  (Complaint ¶¶ 28-29.)

·       The mold remediation company Plaintiffs hired “advised Mrs. Wienberg there was no way that anyone who had opened up the walls at the Property to do repairs could have missed seeing mold within the Property’s walls.”  (Complaint ¶ 33.)

·       The Millers also hired a contractor to investigate the balcony leak, which did not resolve upon replacing the sliding balcony door. The contractor “identified the leak as being exterior to the balcony sliding door” and “when that contractor opened the ceiling to the living room to determine the source of the leak, the wood beams below the balcony showed extensive rot and degradation.”  Thus, “the water intrusion from the balcony was very clearly long-standing but was simply covered up.”  (Complaint ¶ 36.)

·       The Millers further “discovered more water intrusion into the house going all the way up to the roof.”  (Complaint ¶ 37.)

·       “[W]hile the Millers asserted (in connection with the sale of the Property) that ‘roof recently resurfaced to fix previous roof leaks’, and Plaintiffs were provided an invoice regarding purported ‘roof repair’, the issues related to the water intrusion were simply covered up.”  (Complaint ¶ 37.)

·       Plaintiffs incurred $358,496.85 in mold and water damage remediation.  (Complaint ¶ 38.)

Further, Plaintiffs allege three causes of action sounding in fraud, which the Millers have not demurred to, alleging:

41. Plaintiffs allege that Defendants pursued a common course of conduct, acted in concert and conspired with one another, and aided and abetted one another concerning the Property.

42. Plaintiffs allege that Defendants made numerous oral and/or written representations and engaged in conduct intended to and which did deceive Plaintiffs regarding the Property, including that:

• water-damaged material at the Property had been removed;

• likely some mold at the Property that was removed;

• leaks at the Property had been repaired;

• roof repaired and/or resurfaced to fix roof leaks;

• balcony bad been waterproofed;

• water intrusion into house was due to side balcony sliding door.

43. Plaintiffs allege that the above representations by Defendants were false or, in the alternative, were made recklessly and without regard for their truth.

44. Plaintiffs allege that the representations by Defendants were made with the intent to deceive Plaintiffs and to induce reliance by Plaintiffs upon those representations. Plaintiffs allege that the Millers are real estate professionals (licensed Brokers) who have held themselves out as having extensive experience with “Fixers and Flipping” property. Plaintiffs allege that the Millers would not have received a commission from the sale of the Property and/or would not have not been reimbursed for costs they incurred in connection with work at the Property unless the sale of the Property closed. Plaintiffs allege that the Defendants who engaged in work at the Property would not have been paid unless the sale of the Property closed.

[…]

51. Plaintiffs allege that Defendants concealed the true nature and condition of the Property including:

• substantial and extensive mold infestation throughout the Property;

• mold at the Property was concealed with new and/or repaired drywall that was painted;

• water damage at the Property concealed with new and/or repaired drywall that was painted;

• wood beams below the balcony reflecting extensive rot and degradation;

• roof had been not been repaired to prevent water intrusion;

• balcony had been not been repaired to prevent water intrusion.

52. Plaintiffs allege that the mold at the Property would only have been discovered in connection with destructive testing (drilling into the walls to obtain samples) that is not commonly granted during due diligence period, the degraded and rotted wood beams below the balcony was concealed by the ceiling in the living room, and the other repairs (related to balcony and roof above it) purportedly to prevent water intrusion were not known to Plaintiffs to have been ineffective and/or improperly done and could not have been discovered to Plaintiffs except when it rained.

53. Plaintiffs allege they did not know the concealed facts.

54. Plaintiffs allege that Defendants’ representations, actions, and/or conduct were made with the intent to deceive Plaintiffs and to induce reliance by Plaintiffs upon those representations. Plaintiffs allege that the Millers are real estate professionals (licensed Brokers) who have held themselves out as having extensive experience with “Fixers and Flipping” property. Plaintiffs allege that the Millers would not have received a commission from the sale of the Property and/or would not have not been reimbursed for costs they incurred in connection with work at the Property unless the sale of the Property closed. Plaintiffs allege that Defendants who engaged in work at the Property would not have been paid unless the sale of the Property closed.

(Complaint ¶¶ 41-44; 51-54.)

Thus, Plaintiffs have adequately alleged facts with requisite specificity to demonstrate that the Millers knew about the extensive mold and water damage, but fraudulently concealed it from Plaintiffs, to support Plaintiffs’ request for punitive damages.

            Emotional Distress

The Millers next argue that Plaintiffs are not entitled to emotional distress because they seek purely economic damages and suffered no physical impact or injury.  To the contrary, Plaintiffs allege they and their children had to be relocated while the remediation occurred, and they suffered emotional distress:

34. Plaintiffs allege that the mold remediation work was done in phases so that Plaintiffs did not need to move out of the Property while the work was done (except for one day and night) which has limited the amount of alternative living expenses damages. Plaintiffs allege that, given the location of the mold (throughout the Property) including in Plaintiffs’ daughter’s bedroom and the master bedroom, it was necessary for Plaintiffs (and their children) to sleep in different areas of the house while the remediation work was done. Plaintiffs allege that, for instance, while the Plaintiffs’ daughter’s bedroom was being remediated and repaired, Plaintiffs’ daughter was evicted from her bedroom and needed to share a bedroom with her older brother. Plaintiffs allege that, and while the master bedroom was being remediated and repaired because of substandard conditions, Plaintiffs were evicted from their bedroom and were forced to sleep on an air mattress downstairs.

35. Plaintiffs allege that while the work was being done, Plaintiffs lost access to portions of the Property while those areas were contained and remediated, and Plaintiffs had to suffer with the sound of constant loud humming of air filtration machines between when remediation work was completed and until receipt of post-remediation testing. Plaintiffs allege that they work primarily from home, so they had to deal with this inconvenience.

[…]

63. Plaintiffs are informed and believe, and thereon allege, that Defendants’ conduct described herein caused Plaintiffs to suffer serious emotional distress and that Defendants’ conduct was a substantial factor in causing Plaintiffs’ serious emotional distress, which includes suffering, among others, anguish, fright, horror, nervousness, grief, anxiety, worry, and shock.

(Complaint ¶¶ 34-35; 63.) 

            Attorneys’ Fees

The Complaint also seeks “attorneys’ fees as permitted by contract and by law.”  (Prayer at ¶ 10.) 

Code of Civil Procedure section 1033.5, which outlines recoverable costs to a prevailing party under Code of Civil Procedure section 1032, permits the recovery of attorneys’ fees when authorized by contract, statute, or law.  (Code Civ. Proc., § 1033.5, subd. (a)(10).)  Code of Civil Procedure section 1021 provides “[e]xcept as attorney’s fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties [….]”  Similarly, Civil Code section 1717 provides “[i]n any action on a contract, where the contract specifically provides that attorney’s fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney’s fees in addition to other costs.”  (Civ. Code, § 1717, subd. (a).)

Here, the Complaint does not identify any contract or statute that would entitle Plaintiffs to attorneys’ fees.  Nor is it apparent that any such contract would exist as between Plaintiffs, who purchased the subject property, and the Millers, who acted as the seller’s agents.

Therefore, the Court strikes Plaintiffs’ request for attorneys’ fees from the Prayer as to the Millers.

3.     LEAVE TO AMEND

A plaintiff has the burden of showing in what manner the complaint could be amended and how the amendment would change the legal effect of the complaint, i.e., state a cause of action. (See The Inland Oversight Committee v. City of San Bernardino (2018) 27 Cal.App.5th 771, 779; PGA West Residential Assn., Inc. v. Hulven Int'l, Inc. (2017) 14 Cal.App.5th 156, 189.) A plaintiff must not only state the legal basis for the amendment, but also the factual allegations sufficient to state a cause of action or claim. (See PGA West Residential Assn., Inc. v. Hulven Int'l, Inc., supra, 14 Cal.App.5th at p. 189.) Moreover, a plaintiff does not meet his or her burden by merely stating in the opposition to a demurrer or motion to strike that “if the Court finds the operative complaint deficient, plaintiff respectfully requests leave to amend.” (See Major Clients Agency v Diemer (1998) 67 Cal.App.4th 1116, 1133; Graham v. Bank of America (2014) 226 Cal.App.4th 594, 618 [asserting an abstract right to amend does not satisfy the burden].)

Here, Plaintiffs have failed to meet this burden as they have not provided the Court with any additional facts that could be added to correct the identified deficiency.    

CONCLUSION AND ORDER

For the reasons stated, the Court overrules the Millers’ Demurrer to the Sixth Cause of Action for Intentional Infliction of Emotional Distress.  Further, the Court grants in part and denies in part the Millers’ Motion to Strike.  The Court strikes from the Complaint Plaintiffs’ request for attorneys’ fees as to the Millers only.  The Millers’ Motion to Strike is denied in all other respects.

Further, the Court orders the Millers to file an Answer to the Complaint on or before August 22, 2024. 

Further, on the Court's own motion, the Case Management Conference scheduled for August 23, 2024 shall be continued to September 24, 2024 at 8:30 A.M. in Department 207.  All parties shall comply with California Rules of Court, rules 3.722, et seq., regarding Initial and Further Case Management Conferences.  In particular, all parties shall adhere to the duty to meet and confer (Rule 3.724) and to the requirement to prepare and file Case Management Statements (Rule 3.725).    

The Millers shall provide notice of the Court’s ruling and file the notice with a proof of service forthwith. 

DATED:  August 1, 2024                                                       ___________________________

                                                                                          Michael E. Whitaker

                                                                                          Judge of the Superior Court