Judge: Michael Small, Case: 24STCV25627, Date: 2025-06-09 Tentative Ruling

Inform the clerk if you submit on the tentative ruling. If moving and opposing parties submit, no appearance is necessary.

Case Number: 24STCV25627    Hearing Date: June 9, 2025    Dept: 57

In his operative First Amended Complaint (“the FAC”), Plaintiff Richard Hernandez (“Hernandez”) alleges that Defendants Kristi L. Cirtwill (“Cirtwill”) and Kristi L. Cirtwill, Trustee of the Kristi L. Cirtwill Living Trust Dated July 25, 2013 (collectively, “Cirtwill”), agreed to sell to Hernandez two residential properties that were owned by Cirtwill in her Trustee capacity (“the Properties”).  The FAC also names as a Defendant ACT RE Services, Inc. (“ACT”), which is alleged to have been Cirtwill’s broker in connection with the agreement for the sale of the Properties to Hernandez.  The FAC asserts claims for specific performance for breach of contract against Cirtwill, fraud against Cirtwill and ACT, intentional interference with contractual relations against ACT, and declaratory relief against Cirtwill and ACT.

 Pending before the Court is the demurrer of Cirtwill and ACT to the FAC’s claims for fraud and intentional interference with contractual relations.  The Court is sustaining the demurrer as to both claims.  The Court is giving Hernandez leave to amend as to the fraud claim but not as to the claim for intentional interference with contractual relations.

FRAUD

It is clear from the FAC that Hernandez’s fraud claim rests on the premise that Cirtwill and ACT made misrepresentations of fact to him in connection with the agreement for the sale of the Properties.  The elements of a claim for fraudulent misrepresentation are:  “(1) the defendant made a false representation as to a past or existing material fact; (2) the defendant knew the representation was false at the time it was made; (3) in making the representation, the defendant intended to deceive the plaintiff; (4) the plaintiff justifiably relied on the representation; and (5) the plaintiff suffered resulting damages.  (West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 792-793.)   

 Misrepresentations that give rise to a claim for breach of contract are actionable in tort through a fraud claim only when the misrepresentations “violate a duty independent of the contract arising from principles of tort law.” (Robinson Helicopter Co. v. Dana Corp. (2004) 34 Cal.4th 979, 989 [Robinson[.)  “If all the defendant has allegedly done is violate the terms of the parties' contract, depriving the plaintiff of the benefits the contract ensures, the defendant's liability is limited by the contract. Broader tort liability only arises if a defendant violates an independent legal duty and the type of harm that ensues was not reasonably contemplated or accounted for by the contractual parties.” (Rattagan v Uber Technologies, Inc. (2024) 17 Cal.5th 1, 37.)  This is known as the “ independent tort principle.”  (Id. at p. 23).

Applying these tenets here, the FAC contains no allegations of any statements at all by ACT.  Hernandez’s fraud claim against ACT fails for that reason.  As to Cirtwill, the FAC alleges that she made a number of knowingly false representations about the sale of the Properties.  The FAC also alleges that Cirtwill never actually intended to go forward with the sale to Hernandez and instead intended to, and did, induce Cirtwill to delay the transaction so that Cirtwill could consider other parties’ offers to buy the Properties and thereby caused damage to Hermandez.  The Court sustained Cirtwill’s demurrer to Hernandez’s fraud claim in the initial complaint on the ground that Hernandez failed to allege that Cirtwill made a knowingly false representation.  The allegations in the FAC cure that defect.

The problem, however, is that the FAC fails to show that Cirtwill’s alleged misrepresentations are independent of the breach of contract for which Hernandez is suing Cirtwill for specific performance.  Indeed, the FAC states that Cirtwill used the delay that she caused “as a false excuse to repudiate and breach the[] signed, written agreements.” (FAC, ¶ 29.)  Hernandez does not allege any harm beyond the breach of contract that he suffered as a result of Cirtwill’s alleged misrepresentations.  As a result, the fraud claim, as alleged, falls under the independent tort principle.  Cirtwill cited Robinson and invoked the independent tort principle as a ground to sustain the demurrer.   Hernandez did not address this argument in his opposition to the demurrer.  Under the circumstances, the Court is sustaining the demurrer to the fraud claim with leave to amend as it is reasonably possible that Hernandez could plead around the independent tort principle.  (Smith v. BP Lubricants USA Inc. (2021) 64 Cal.App.5th 138, 145 [in disposing of a demurrer to a complaint, leave to amend the complaint should be given when it is reasonably possible that an amendment would cure the defect that caused the demurrer to be sustained].)

 INTENTIONAL INTEFERENCE WITH CONTRACTUAL RELATIONS

The elements of a cause of action for intentional interference with contractual relations are “(1) the existence of a valid contract between the plaintiff and a third party; (2) the defendant's knowledge of that contract; (3) the defendant's intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.” (Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1148.)  The first element requires that the defendant be “a stranger to the contract,” meaning that the defendant is neither a party to the contract nor an agent for a party to it.  (Redfearn v. Trader Joe’s Co. (2018) 20 Cal.App.5th 989, 998, 1003; Woods v. Fox Broadcasting Sub,. Inc. (2005) 129 Cal.App.4th 344, 352-353.)

In his initial complaint, Hernandez asserted the claim for intentional interference with contractual relations against Cirtwill.  The Court sustained the demurrer to that claim on the ground that Cirtwill was a party to the contract with Hernandez and therefore could not be liable to Herandez for intentional interference with contractual relations. (March 12, 2025 Minute Order, p. 2.)   In sustaining the demurer to that claim, the Court gave Hernandez leave to amend the complaint.

In the FAC, Hernandez asserts the claim for intentional interference with contractual relations against ACT alone.  Cirtwill is not named as a Defendant on the claim.  The FAC does not allege that ACT itself is a party to the contract between Hernandez and Cirtwill for the sale of the Properties.  However, the FAC alleges that ACT was Cirtwill’s broker in connection with the sale.  This allegation is fatal to Hernandez’s claim against ACT for intentional interference with contractual relations because a broker for a seller of real property is an agent of that party.  (R.J. Kuhl Corp. v. Sullivan (1993) 13 Cal.App.4th 1589. 1599.)  As Cirtwill’s agent, ACT is not a stranger to the contract between Hernadez and Cirtwill.  For this reason, the Court is sustaining the demurrer to the claim against ACT for intentional interference with contractual relations.   Having initially named Cirtwill as the Defendant on the claim and then ACT but failing both times on the ground that neither Cirtwill nor ACT is a stranger to the contract, Hernandez cannot at this stage possibly amend the complaint to cure this defect.  Accordingly, the Court is not giving Hernandez further leave to amend the complaint as to the claim for intentional interference with contractual relations.