Judge: Michael Shultz, Case: 24STCV29212, Date: 2025-04-10 Tentative Ruling
Case Number: 24STCV29212 Hearing Date: April 10, 2025 Dept: 40
24STCV29212 Olivia Acosta v. Alexander
Leonard Pena, et al.
Thursday,
April 10, 2025
[TENTATIVE]
ORDER
I.
BACKGROUND
This
action arises from the Plaintiff’s purchase of investment real property from a seller
represented by the Aldana agent defendants and Debra Wohlschlegel (“Defendant”),
the listing agent and seller’s agent of contact. The complaint alleges that Plaintiff
relied on representations made by the seller’s agents with respect to the condition
and characteristics of the property and its suitability as investment property.
Plaintiff alleges claims for breach of contract and related tort claims for
interference with economic advantage and breach of the implied covenant of good
faith and fair dealing, fraud and related claims, breach of fiduciary duty, and
conspiracy.
II.
ARGUMENTS
A.
Demurrer and motion to strike filed January 23,
2025.
Defendant
argues that the fraud and intentional misrepresentation claims are not alleged
with specificity. Plaintiff did not allege what representations were made by
Defendant Wohlschlegel. Plaintiff alleges this claim against Defendants
collectively.
Conspiracy
is not an independent cause of action. The claim for punitive damages cannot be
recovered based on the facts alleged and should be stricken.
B.
Oppositions filed March 27, 2025.
Plaintiff
argues that the facts to support the claim for fraud and intentional
misrepresentation meet heightened pleading standards. The claim for fraud is
meant as an “umbrella” claim concerning all potential species of fraud. Whether
Defendant acted with fraudulent intent is for the trier of fact to decide.
The
conspiracy claim is not alleged in a vacuum but rather in the context of all
Defendants’ conduct to defraud plaintiff (third and fifth causes of action.)
These claims provide the required acts to support recovery of punitive damages.
C.
Replies filed April 3, 2025.
Defendant
argues that Plaintiff’s opposition does not cure the defects identified by
Defendant. The claims are not specific enough. Defendant did not make the
written disclosures; they are made by the seller.
III.
LEGAL STANDARDS
The bases for demurrer are limited by
statute and may be sustained for reasons including failure to state facts to
state a cause of action and uncertainty. (Code
Civ. Proc., § 430.10.) 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.)
All that is required is to "set forth
the essential facts of plaintiff's case with reasonable precision and with
particularity sufficiently specific to acquaint defendant of the nature,
source, and extent of the cause of action.” (Gressley
v. Williams (1961) 193 Cal.App.2d 636, 643–644.)
A motion to strike is limited to matters
that appear on the face of the pleading or on any matter of which the court can
take judicial notice. (Code
Civ. Proc., § 437.) The court may strike out any irrelevant, false, or
improper matter inserted in any pleading; or strike all or any part of the
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).)
IV.
DISCUSSION
A.
Demurrer to the third cause of action for fraud
and fifth cause of action for intentional misrepresentation is overruled.
The
third cause of action is based on Defendants’ representations affirming the validity
and currentness of the building permits and zoning for residential and
commercial use. (Complaint, ¶65.) Defendants provided a Commercial Seller
Property Questionnaire explaining repairs, alterations, and remodeling made to
the property but did not make further representations of unpermitted work.
(Complaint, ¶¶ 64-65.) The affirmative representations were not true. Plaintiff
relied on the representations made by the real estate and broker agents who
were contractually bound to disclose permits, modifications, governmental
compliance, and tenancy-related issues. (Complaint, ¶ 71.) Plaintiff was
required to repair a mold issue and pay excess property taxes because square
footage was misrepresented. (Complaint, ¶72.)
The fifth cause
of action for intentional misrepresentation differs in that Plaintiff includes
the representation that there were six leases on the subject property and that
there were discrepancies of square footage. Plaintiff adds the allegation that
Defendants orally confirmed the legal uses for the property. (Complaint, ¶ 92,
95)
Both claims meet
heightened pleading requirements. Plaintiff alleges she communicated with the
Aldana defendants in April 2022 and the misrepresentation were verbally made in
part (Complaint, ¶¶ 2, 95-96.) Wohlschlegel is identified as an agent of
contact for the seller and represented herself as the seller’s real estate
agent and broker. (Complaint, ¶¶ 5-9.) During the purchase process Wohlschlegel represented that the property was a
six-unit property that did not contain unpermitted work and could be used to
receive rental income. (Complaint, ¶ 19.) The representation was also contained
in Wohlschlegel listing. (Complaint, ¶¶ 4-5.)
Plaintiff
attaches the purchase agreement signed in part by Wohlschlegel obligating her
to disclose material facts and defects. (Complaint, Ex. A, ¶ 11.) The time
period for these representations are specific enough as all alleged
misrepresentations were made during the process of Plaintiff’s purchase of the
real property, between April 2022 and the date Plaintiff signed the purchase
agreement on June 29, 2022. (Id. at page 17.)
Plaintiff’s agents located the
property based on a listing with Defendant as the agent of contact. (Complaint,
¶¶ 3-5.) The listing described the Subject Property as a six-unit, 2,609 sq.
ft. property on a 6,578 sq. ft. lot, with a zoning designation of LCR1YY, and
as a “great opportunity for an investor.” (Complaint ¶¶ 4, 63, 91.) Plaintiff
later discovered on the Los Angeles County Assessor Portal, the Subject
Property’s use type was listed as “Commercial,” had no official residential
units but three subparts of the building, and a land square footage of 5,368
sq. ft. (Complaint, ¶ 37.) Plaintiff alleges Defendants intentionally
misrepresented these material facts. (Complaint, ¶ 100.) Plaintiff relied on the representations
because Defendants were brokers who were contractually bound to make the
correct disclosures, supporting the element of reasonable reliance. (Complaint,
¶ 104.) Defendants allegedly made these misrepresentations to induce Plaintiff
to buy the property. (Complaint, ¶ 105.)
B.
The eighth cause of action for civil conspiracy
against all Defendants is overruled.
Civil conspiracy is not a cause of action, but
rather a legal doctrine that imposes liability on persons who did not actually
commit a tort but acted in concert with another tortfeasor. To support this theory of liability,
Plaintiff must allege "1) the formation and operation of the conspiracy,
(2) wrongful conduct in furtherance of the conspiracy, and (3) damages arising
from the wrongful conduct.” (AREI
II Cases (2013) 216 Cal.App.4th
1004, 1022.) A conspiracy
“must be activated by the commission of an actual tort." (Applied
Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 511.)
While it is not an independent cause of
action as argued by Defendant, identifying this basis for liability as a
separate claim does not render the complaint fatally 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).)
Demurrers for uncertainty are disfavored and are strictly construed, even where
a complaint is in some respects uncertain, “because ambiguities can be
clarified under modern discovery procedures.” (Khoury
v. Maly's of California, Inc. (1993)
14 Cal.App.4th 612, 616; Lickiss
v. Financial Industry Regulatory Authority (2012) 208 Cal.App.4th 1125, 1135.)
By separately alleging this claim, the
complaint clarifies the basis for liability against all Defendants, including Wohlschlegel.
C.
Motion to strike the claim for punitive damages
is denied.
A
plaintiff may recover on a claim for exemplary damages where the defendant is
guilty of oppression, fraud, or malice. (Civ. Code, § 3294 subd. (a).) The predicate acts to support the claim
must be intended to cause injury or must constitute “malicious” or “oppressive”
conduct as defined by statute. “Malice” is defined as “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.” (Civ.
Code, § 3294 subd. (c)(1); College
Hospital Inc. v. Superior Court (1994) 8 Cal.4th 704, 725 ["malice involves awareness of dangerous
consequences and a willful and deliberate failure to avoid them"].)
"Oppression" is defined as “despicable conduct that subjects a person
to cruel and unjust hardship in conscious disregard of that person's rights.” (Civ. Code, § 3294 subd. (a) subd. (c)(2).)
The adequately alleged claims for fraud
and intentional misrepresentation referenced above serve as predicate acts
necessary to support recovery of punitive damages.
V.
CONCLUSION
Based on the foregoing, demurrer is
OVERRULED. The motion to strike is DENIED. Defendant is ordered to file an
answer in 30 days.