Judge: Michael Shultz, Case: 22CMCV00331, Date: 2023-01-10 Tentative Ruling
Case Number: 22CMCV00331 Hearing Date: January 10, 2023 Dept: A
22CMCV00331
Antonio Carlin, Guillermo Rios v. Esteban Carlin
[TENTATIVE] ORDER
I.
BACKGROUND
The complaint, filed on September 21, 2022, alleges that
Plaintiffs and Defendant orally agreed to buy real property together, to share
title and expenses equally, and to split profits if the house was sold. Because
of Plaintiffs’ difficulties, only Defendant was on title to the home. Defendant
now claims to be the sole owner. Plaintiffs allege claims for partition,
accounting, breach of contract, breach of the implied covenant of good faith
and fair dealing, fraud, constructive trust, and declaratory relief.
Defendant demurs to all seven causes of action on grounds the
complaint fails to state facts sufficient to support each claim as further
discussed below. Defense counsel met and conferred with Plaintiffs' counsel as
required by Code of Civil Procedure, section 413.40. Declaration of Robert A.
Krasney, ¶¶ 3-8. The court has
considered the demurrer, Plaintiffs’ opposition thereto, and Defendant’s reply
brief.
II.
LEGAL STANDARDS
A demurrer tests the sufficiency of a
complaint as a matter of law and raises only questions of law. Schmidt v. Foundation Health (1995) 35 Cal.App.4th 1702, 1706. The court must
assume the truth of (1) the properly pleaded factual allegations; (2) facts
that can be reasonably inferred from those expressly pleaded; and (3)
judicially noticed matters. Blank v.
Kirwan (1985) 39 Cal.3d 311, 318. The court may not consider contentions, deductions,
or conclusions of fact or law. Moore v. Conliffe (1994) 7 Cal.4th 634, 638.
Because a demurrer tests the legal
sufficiency of a complaint, the plaintiff must show that the complaint alleges
facts sufficient to establish every element of each cause of action. Rakestraw v. California Physicians Service (2000) 81 Cal.App.4th 39, 43. Where the complaint
fails to state facts sufficient to constitute a cause of action, courts should
sustain the demurrer. Code Civ. Proc., § 430.10(e); Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126. The Plaintiff is required
to allege facts "with reasonable precision and with particularity
sufficiently specific to acquaint the defendant with the nature, source, and
extent of his cause of action.” Gressley v. Williams (1961) 193 Cal.App.2d 636, 643-644. Whether the
Plaintiff will be able to prove the pleaded facts is irrelevant. Stevens v. Superior Court (1986) 180 Cal.App.3d 605, 609–610.
A demurrer may also be sustained if a complaint is
“uncertain.” Uncertainty exists where a complaint’s factual allegations are so
confusing, they do not sufficiently apprise a defendant of the issues it is
being asked to meet. Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2; Code Civ.
Proc., § 430.10(f).
III.
DISCUSSION
A.
Demurrer to the first and third causes of action for partition and
for breach of contract, respectively is OVERRULED.
Defendant argues that Plaintiffs
have not established an ownership interest in the real property based on a
contractual relationship with Defendant. The purported oral agreement is barred
by the statute of frauds, and therefore, Plaintiffs do not have standing to
bring a partition action.
Plaintiffs argue that the
complaint alleges facts establishing their ownership interest since 2005, when
the parties purchased the real property. The statute of frauds does not apply
where there is part performance.
In reply, Defendant argues that
Plaintiffs have not adequately alleged the existence of an oral contract.
Plaintiff Carlin does not allege any consideration, nor have Plaintiffs
established an exception to the statute of frauds.
A partition
action may be commenced by a co-owner of personal property, or by an "owner
of an estate of inheritance, an estate for life, or an estate for years in real
property where such property or estate therein is owned by several persons
concurrently or in successive estates." Code Civ. Proc., § 872.210." While
statutory in origin, it is an equitable proceeding whose original purpose “was
to permit cotenants to avoid the inconvenience and dissension arising from
sharing joint possession of land. An additional reason to favor partition is
the policy of facilitating transmission of title, thereby avoiding unreasonable
restraints on the use and enjoyment of property.” Cummings v. Dessel (2017) 13 Cal.App.5th 589, 596
Defendant does not cite to any authority for the
proposition that Plaintiffs cannot bring an action to partition based on an
oral contract. California holds otherwise. Tuffree v. Polhemus (1895) 108 Cal. 670, 677 [“The findings of fact establish an executed parol partition; and
that land may be partitioned by parol in this state is well settled"]. Tuffree v. Polhemus (1895) 108 Cal. 670, 677. Plaintiffs allege that the parties entered in their oral
agreement in 2005 to purchase property with equal interests, sharing of
expenses, and if they decided to sell, the profits would equally shared.
Complaint ¶¶ 11-12, 16, 19.
The claim for
breach of contract is adequately alleged. The elements of a claim for breach of
contract are (1) the existence of a valid and existing contract between the
parties, (2) Plaintiff’s performance or excuse for non-performance, (3)
Defendant’s breach; and (4) resulting damage. Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186. A contract can be alleged either verbatim or according to its
legal intendment and effect. An oral contract may be pleaded generally as to
its effect, “because it is rarely possible to allege the exact words.” Scolinos v. Kolts (1995) 37 Cal.App.4th 635, 640. To plead a contract by its legal effect, plaintiff must “allege the substance of its relevant terms.”
Heritage Pacific Financial, LLC v. Monroy (2013) 215
Cal.App.4th 972, 993. The complaint adequately alleges
the effect of the parties’ agreement with respect to the ownership,
maintenance, and conditions for sale of the real property. Complaint, ¶¶ 11-12,
16, 18- 19.
Defendant has not established that
the oral contract is barred by the statute of frauds. Contracts for the sale of
real property or of an interest therein are required to be in writing Civ.
Code, § 1624(a)(3). However, under the doctrine of part performance, a party is
estopped from asserting the statute of frauds as a defense "after one
party has been induced by the other seriously to change his position in
reliance upon the oral contract." Oren Realty & Development Co. v.
Superior Court (1979) 91 Cal.App.3d 229, 234. To be sufficient, the part
performance must be a change of position to avoid an “unjust and unconscionable
result, amounting in effect to a fraud.” Id. at 235. Plaintiffs allege that
in reliance on their oral contract, they made substantial renovations to the
property and paid the mortgage, property taxes, utilities, and bills. Complaint
¶¶ 17-18, 28. Accordingly, Plaintiffs’ part performance is sufficient to
support a change of position and that the contract falls outside the statute of
frauds.
In Reply, Defendant argues that
Plaintiff Carlin did not allege any consideration in support of the purported
contract. Consideration is defined as "any benefit conferred, or agreed to
be conferred, upon the promisor, by any other person, to which the promisor is
not lawfully entitled." Civ. Code, § 1605. Both
Plaintiffs allege they made the mortgage and property taxes as well as bills
and other expenses. Complaint ¶ 18. Accordingly, the contract claim is
adequately alleged.
While Defendant’s reply contends that
Plaintiffs do not have proof of performance, a demurrer tests the legal
sufficiency of the allegations. It does not test the truth of the allegations,
the Plaintiffs’ ability to prove them, or the possible difficulty in making
such proof. Saunders v. Superior Court (1994) 27 Cal.App.4th 832, 840.
B.
Demurrer to second cause of action
for accounting is OVERRULED.
Plaintiffs request an accounting
to determine the sums due to Defendant for Plaintiffs’ interest in the property
less credits for expenses paid by Plaintiffs. Complaint ¶ 41. Defendant argues
that this claim is barred by the four-year statute of limitations, is not
supported by any fiduciary relationship between the parties, and an accounting
cannot be based on an oral contract. Defendant provides no authority for these
contentions.
An accounting is an equitable
proceeding which is proper where there is an unliquidated and unascertained
amount owing that cannot be determined without an examination of the debits and
credits on the books to determine what is due and owing. Green Valley Landowners Assn. v. City of Vallejo (2015) 241
Cal.App.4th 425, 442. While the claim can be based on
a fiduciary relationship, an accounting is not a remedy limited to such relationships.
An accounting claim “requires a
showing that a relationship exists between the plaintiff and defendant that
requires an accounting, and that some balance is due the plaintiff that can
only be ascertained by an accounting. Teselle
v. McLoughlin (2009) 173 Cal.App.4th 156, 179.
Notwithstanding the foregoing, Plaintiffs allege that the parties’
relationship was fiduciary in nature. Complaint, ¶ 44. A fiduciary relationship
is:
“any
relation existing between parties to a transaction wherein one of the parties
is duty bound to act with the utmost good faith for the benefit of the other
party. Such a relation ordinarily arises where a confidence is reposed by one
person in the integrity of another, and in such a relation the party in whom
the confidence is reposed, if he voluntarily accepts or assumes to accept the
confidence, can take no advantage from his acts relating to the interest of the
other party without the latter's knowledge or consent." Wolf
v. Superior Court (2003) 107 Cal.App.4th 25, 29
The trust relationship is supported by the allegation that
Defendant alone took title to the home despite the parties’ oral agreement for
an equal ownership interest. Complaint, ¶ 20. Plaintiffs have adequately alleged
an accounting based on the parties’ contractual and fiduciary relationship as
co-owners of the property.
A claim for accounting is barred
“when it appears that the statute has run against the basic cause of action to
which the accounting is a mere incident.” Phillis v. City of Santa Barbara (1964) 229 Cal.App.2d 45, 68. The second cause of action is based on Defendant’s alleged breach
of the oral contract as well as fraud (discussed below). The statute of
limitations on an oral contract is contract is two years. Code Civ. Proc., § 339. The claim
accrues from the date of the promisor’s failure “to do the thing contracted for
at the time and in the manner contracted.” Professional Collection Consultants v. Lauron (2017) 8
Cal.App.5th 958, 966.
The statute of limitations for
fraud is three years and does not accrue until the discovery by the aggrieved
party, of the facts constituting the fraud or mistake. Code Civ. Proc., § 338.
Defendant argues without citation
to any authority or allegation in the complaint that the claim is barred
because “Plaintiffs have waited 18 years to bring this action.” Demurrer 15:11-14.
Defendant does not discuss when Plaintiffs’ claim accrued on either the
contract or fraud claim. In order to sustain a demurrer based on the statute of
limitations defect, the defect must clearly and affirmatively appear
on the face of the complaint. It is not enough that the complaint might be
barred. Citizens for a Responsible Caltrans Decision v. Department of
Transportation (2020) 46 Cal.App.5th 1103, 1117
C.
Demurrer to the fourth cause of action for breach of the implied
covenant of good faith and fair dealing is OVERRULED.
Defendant argues that the covenant
of good faith and fair dealing is implied in every contract. Since the contract
claim is not adequately pleaded, this claim also fails. Defendant contends that
the claim is based on conjecture because Plaintiffs did not “lay the foundation”
to show a contractual relationship. For reasons previously expressed, the claim
for breach of contract is adequately alleged.
D.
Demurrer to the fifth cause of
action for fraud is OVERRULED.
Defendant again argues without any
citation to authority that the complaint does not meet the requirements of
pleading a claim for fraud with specificity. A claim for
fraud requires facts to support the following elements: (1) a
misrepresentation, (2) made with knowledge of its falsity, (3) Defendant
intended to defraud Plaintiff, i.e., induce Plaintiff’s reliance, (4) Plaintiff
justifiably relied on the misrepresentation, (5) causing damage. Nagy v. Nagy (1989) 210
Cal.App.3d 1262, 1268. Fraud claims are subject to strict requirements of
particularity in pleading which necessitate pleading facts showing “how, when,
where, to whom, and by what means the representations were tendered." Stansfield v.
Starkey (1990) 220 Cal.App.3d 59, 73. The requirement “applies not only
to the alleged misrepresentation, but also to the elements of causation and
damage." Moncada v.
West Coast Quartz Corp. (2013) 221 Cal.App.4th 768, 776.
Plaintiffs allege that Defendant’s misrepresentation that the
parties would share equally in the ownership of the home was made orally in
2005. Complaint, ¶ 11. The property was purchased in June of 2005 “with the
clear understanding that all parties were equal owners.” Complaint ¶ 16. Defendant
knowingly lied to Plaintiffs by telling them they would all be owners.
Complaint ¶ 62. Defendant allegedly continued to tell Plaintiffs they were all
equal owners to induce reliance. Complaint ¶ 3. Plaintiffs’ reliance was
justified as Defendant is Plaintiff Carlin’s brother and both were friends with
Plaintiff Rios. Complaint ¶ 64. Plaintiffs allege damage in that they have paid
for the mortgage, taxes, utilities, expenses, and labor in renovating the home,
however, Defendant refuses to give Plaintiffs’ their share. Complaint ¶ 65. Accordingly,
this claim is adequately alleged.
E.
The sixth cause of action for
constructive trust is OVERRULED.
An involuntary trustee is "one who gains a thing by fraud,
accident, mistake, undue influence, the violation of a trust, or other wrongful
act, unless he or she has some other and better right thereto.” Civ. Code, §
2224. Under those circumstances, that person is an “involuntary
trustee of the thing gained, for the benefit of the person who would otherwise
have had it." Civ. Code, §
2224. A constructive trust is imposed where there is "(1) a
specific, identifiable property interest, (2) the plaintiff's right to the
property interest, and (3) the defendant's acquisition or detention of the
property interest by some wrongful act." Higgins v.
Higgins (2017) 11 Cal.App.5th 648, 659.
Plaintiffs have identified their respective
real property interests (Complaint, ¶¶ 6, 12); Plaintiffs alleged their rights
pursuant to an oral agreement (Complaint, ¶ 12); and the Defendant’s wrongful
detention of the property by fraud and breach of contract. Defendant states
that Plaintiffs are required to establish this claim by “clear, satisfactory
and convincing evidence.” Taylor v.
Polackwich (1983) 145 Cal.App.3d 1014, 1022. Taylor
concerned the sufficiency of evidence at trial, not the requirements of
pleading. Taylor at 1022.
F.
Demurrer to the seventh cause of
action for declaratory relief is OVERRULED.
Defendant argues that Plaintiffs’ failure to establish a valid
contractual relationship does not give rise to a claim for declaratory relief. As
discussed above, the claim for breach of contract is adequately alleged.
An action for declaratory relief is sufficient if it sets forth
facts showing the existence of an "actual controversy relating to the
legal rights and duties of the respective parties under a contract and requests
that the rights and duties be adjudged. (Code Civ.
Proc., § 1060.) If these requirements are met, the court must declare the
rights of the parties whether the facts alleged establish that the plaintiff is
entitled to a favorable declaration.” Nede Mgmt.,
Inc. v. Aspen American Ins. Co. (2021) 68 Cal.App.5th 1121.
Read as a whole, the complaint alleges an actual controversy
between the parties with respect to their rights to the real property pursuant
to an oral agreement for the ownership and disposition of land. Complaint, ¶
74. The contract claim is adequately pleaded and incorporated into the seventh
cause of action. Plaintiffs ask for a judicial determination of the parties’
rights, title, and interest. Complaint ¶ 75. The claim is adequately pleaded.
VI. CONCLUSION
Based on the foregoing, Defendant’s
demurrer to all seven causes of action is OVERRULED. Defendant is ordered to
answer within 10 days.” Cal Rules of
Court, Rule 3.1320.