Judge: Monica Bachner, Case: 20STCV22893, Date: 2022-12-08 Tentative Ruling

Case Number: 20STCV22893    Hearing Date: December 8, 2022    Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

Defendant South Coast Piering, Inc., DBA Saber Foundations’ motion for summary judgment is denied.  Defendant’s motion in the alternative for summary adjudication is denied as to Issues 1 and 2 of the 1st and 2nd causes of action. 

Defendant South Coast Piering, Inc., DBA Saber Foundations (“Saber”) (“Defendant”) moves for summary judgment, or in the alternative, summary adjudication of the 1st and 2nd causes of action in Plaintiff Oliver Banham’s (“Banham”) (“Plaintiff”) second amended complaint (“SAC”).  (Notice of Motion, pgs. 1-2.)  Defendant moves for summary adjudication of both causes of actions on the following overlapping issues: (1) Plaintiff cannot establish thorough admissible evidence that Defendant, or anyone acting on its behalf, made a fraudulent statement(s) or material misrepresentation [Issue 1]; and (2) Plaintiff cannot establish through admissible evidence any reliance upon any statements made by Defendant, or anyone acting on its behalf, which contradict the terms of the written agreement [Issue 2].

Request for Judicial Notice

Defendant’s 3/30/2022 Request for Judicial Notice of Plaintiff’s Second Amended Complaint is denied as there is no need to take judicial notice since the Court can review the records of the case at hand.

Evidentiary Objections

Defendant’s 12/2/2022 evidentiary objections to the Declaration of Banham are overruled as to Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9, 12, 13, 14, 15, 16, and 17.[1]

Defendant’s 12/2/2022 evidentiary objections to the Decl. of Rocky Munari (“Munari”) are overruled as to Nos. 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, and 39.

Defendant’s 12/2/2022 evidentiary objections to the Declaration of Robert Hollingsworth (“Hollingsworth”) are overruled as to Nos. 40, 41, 42, 43, 44, 45, 46, and 47.

Procedural Background

On June 17, 2020, Plaintiff filed his original complaint against Defendant. On December 2, 2020, Plaintiff filed his first amended complaint (“FAC”).  On May 13, 2021, Plaintiff filed the operative SAC alleging two causes of action: (1) fraud, and (2) negligent misrepresentation arising from Plaintiff’s alleged reliance of Defendant’s inspection of real property located at 3358 Troy Drive, Los Angeles, CA (“Property”).  On March 30, 2022, Defendant filed its motion for summary judgment.  On November 23, 2022, Plaintiff filed his opposition.  On December 2, 2022, Defendant filed its reply.

Summary of Allegations

Plaintiff alleges on or about October 2014, he was in the process of considering whether to purchase the Property and learned during physical inspection of the Property that the foundation had experienced some settlement causing cracks in some of the walls and floor and uneven floors in certain areas of the house.  (SAC ¶6.)  Plaintiff alleges he expressed his concerns to the seller of the Property about purchasing the Property with the known foundation/settlement issues; in response, the seller informed Plaintiff that it obtained an opinion of Defendant, a foundation repair specialist, with Defendant’s findings and recommendations documented in a report dated March 6, 2014, and provided Plaintiff with a copy of Defendant’s report on October 14, 2014.  (SAC ¶¶7, 8.)  

Plaintiff alleges the seller introduced Plaintiff to Defendant in order for Plaintiff to discuss with Defendant the details of the report to aid Plaintiff in his determination whether to purchase the Property and, if so, what action to take to re-level the property and prevent future settling.  (SAC ¶9.)  Plaintiff alleges he had a discussion with Defendant’s representative, Joe Johnson, regarding the report, its findings, and recommendations, and advised the representative that he was a prospective purchaser of the Property and had been given a copy of the report to review and rely on in making his determination whether to purchase the property.  (SAC ¶11.)  Plaintiff alleges Defendant’s representative confirmed to Plaintiff that Defendant conducted a thorough examination of the Property, and based on that examination issued a written report, which included the following representations: (a) that the floor areas of the Property has experienced settlement causing the floor areas it to be out of level in the amount of 0.5” over 10”; (b) that the Property could be re-leveled by the injection of a polyurethane grout into the soils beneath the foundation; and (c) the repair method would be permanent and prevent any future settlement of the foundation and the house.  (SAC ¶12.)  Plaintiff alleges Defendant’s representative represented to Plaintiff that Plaintiff could rely on the report and Defendant would agree to provide Plaintiff with re-leveling services if Plaintiff purchased the Property and that the work Defendant performed would be guaranteed to re-level the property and prevent future settlement.  (SAC ¶13.)

Plaintiff alleges he agreed to purchase the Property based on Defendant’s representations and to retain Defendant to perform the recommended repairs and stabilize the Property and purchased the property in or about November 2014.  (SAC ¶¶14, 15.)  Plaintiff alleges on November 21, 2015 [sic], Defendant, through its employee Joe Johnson, sent Plaintiff a written agreement via email to perform the stabilization services and asked Plaintiff to initial, sign, and return the agreement to Defendant, after which Defendant would schedule the work.  (SAC ¶16.)  Plaintiff alleges on November 24, 2014, based upon the representations made by Defendant, Plaintiff entered, executed, and return to Defendant the written agreement to conduct the necessary repairs (“Agreement”).  (SAC ¶17, Exh. A.)

Plaintiff alleges shortly after the Agreement was executed, Defendant entered onto the Property and injected polyurethane grout beneath the foundation, causing some lifting of the house.  (SAC ¶18.)  Plaintiff alleges in or about March 2016, Plaintiff noticed that certain cracks in the walls of the house were growing larger, and he contacted Defendant and inquired why the work it had performed had not prevented further cracking.  (SAC ¶19.)  Plaintiff alleges Defendant’s representative to whom Plaintiff spoke responded that sometimes additional grout injection was necessary to stabilize the foundation and prevent additional settlement, and pursuant to Defendant’s warranty given the Plaintiff in the Agreement, Defendant would inject additional grout under the foundation. (SAC ¶19.)  Plaintiff alleges in March 2016, Defendant came to the Property and injected more polyurethane grout under the foundation.  (SAC ¶20.)  Plaintiff alleges in December 2016, Plaintiff noticed certain cracks in the walls and the foundation were increasing in size, despite the second grout inspection; Defendant once again made a warranty visit to the Property and injected more grout.  (SAC ¶21.)  Plaintiff alleges in 2019 he commissioned an investigation of geologic conditions of the Property by a licensed geologist to determine the cause of the cracking and the efficacy of Defendant’s grout injections.  (SAC ¶23.)  Plaintiff alleges in July 2019, because of the investigation, Plaintiff discovered the soils beneath the foundation were a type that would cause settlement of the foundation and the injection of polyurethane grout would not remedy the issue, effectively raise the house so that it was level, or prevent the house from further settlement in the future.  (SAC ¶24.)

Fraud & Negligent Misrepresentation (1st & 2nd COAs)

“The elements of fraud are (a) a misrepresentation (false representation, concealment, or nondisclosure); (b) scienter or knowledge of its falsity; (c) intent to induce reliance; (d) justifiable reliance; and (e) resulting damage.”  (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.) The facts constituting the alleged fraud must be alleged factually and specifically as to every element of fraud, as the policy of “liberal construction” of the pleadings will not ordinarily be invoked.  (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)  To properly allege fraud against a corporation, the plaintiffs must plead the names of the persons allegedly making the false representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.  (Tarmann v. State Farm Mutual Automobile Insurance Co. (1991) 2 Cal.App.4th 153, 157.)

The elements of a cause of action for negligent misrepresentation include “[m]isrepresentation of a past or existing material fact, without reasonable ground for believing it to be true, and with intent to induce another’s reliance on the fact misrepresented; ignorance of the truth and justifiable reliance on the misrepresentation by the party to whom it was directed; and resulting damage.”  (Hydro-Mill Co., Inc. v. Hayward, Tilton & Rolapp Insurance Associates, Inc. (2004) 115 Cal.App.4th 1145, 1154, quotation marks omitted.)  The facts constituting the alleged fraud must be alleged factually and specifically as to every element of fraud, as the policy of “liberal construction” of the pleadings will not ordinarily be invoked.  (Lazar, 12 Cal.4th at pg. 645.)  To properly allege fraud against a corporation, the plaintiff must plead the names of the persons allegedly making the false representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.  (Tarmann, 2 Cal.App.4th at pg. 157.)

Plaintiff alleges Defendant’s representative confirmed to Plaintiff that Defendant conducted a thorough examination of the Property, and based on that examination issued a written report, which included the following representations: (a) that the floor areas of the Property has experienced settlement causing the floor areas it to be out of level in the amount of 0.5” over 10”; (b) that the Property could be re-leveled by the injection of a polyurethane grout into the soils beneath the foundation; and (c) the repair method would be permanent and prevent any future settlement of the foundation and the house.  (SAC ¶12.)  Plaintiff alleges Defendant’s representative represented to Plaintiff that Plaintiff could rely on the report and Defendant would agree to provide Plaintiff with re-leveling services if Plaintiff purchased the Property and that the work Defendant performed would be guaranteed to re-level the property and prevent future settlement.  (SAC ¶13.)  Plaintiff alleges these representations were false in that (a) polyurethane grout injection was not a suitable repair method for the settlement the Property was experiencing and (b) such injections would not prevent future settlement of the house.  (SAC ¶¶26, 34.)  Plaintiff alleges Defendant was aware or should have been aware of the falsity of the representations at the time they were made, made them intentionally, and understood and intended that Plaintiff would rely on the representations in making his decision to purchase the Property and retain Defendant to perform the recommended work.  (SAC ¶¶27, 35.)  Plaintiff alleges he relied on the truth of each of the representations in deciding to purchase the Property and to retain Defendant to perform the recommended work.  (SAC ¶36.) Plaintiff alleges that had he been aware of the falsity of the representations at the time they were made, he would not have purchased the Property for the price agreed and would not have retained Defendant to perform the recommended repairs.  (SAC ¶¶29, 37.)  Plaintiff alleges as a direct and proximate result of Defendant’s conduct, Plaintiff has suffered damage, including, but not limited to, the costs to properly repair the property and/or the diminution in value of the Property based upon the true cost to correct the settlement issue, the costs incurred to determine the falsity of Defendant’s representations plus the amounts paid to Defendant for the failed repair efforts.  (SAC ¶¶30, 38.)

Defendant argues Plaintiff’s claims fail as a matter of law because Plaintiff has not produced a single piece of admissible evidence or offered testimony of any false statement made by Defendant or its representatives that induced reliance and upon which Plaintiff justifiably relied.  (Memorandum, pg. 8.)

1. Whether Defendant is entitled to summary adjudication on the 1st and 2nd causes of action because Plaintiff cannot establish through admissible evidence that Defendant, or anyone acting on Defendant’s behalf, made fraudulent statement(s) or material misrepresentation(s) [Issue 1].

Defendant submitted evidence showing Plaintiff cannot establish Defendant or its representatives made a false statement or material misrepresentation.  Specifically, Defendant submitted evidence that on or about October 22-23, 2014, Defendant’s representative, Johnson, exchanged a number of emails with Plaintiff’s real estate agent Rocky Munari (“Munari”), in which Johnson indicated he had spoken with the seller’s contractor, Acker Resources (“Acker”), and saw the engineered plans and permits Acker pulled, and felt comfortable with the work and made additional recommendations to “fix the minor foundation repairs, expose some bolts, and cut the shear wall vents properly,” which Munari forwarded to Plaintiff.  (Disputed Separate Statement of Fact [“DSSF”] 15; Decl. of Harris, Exh. 3 Special Interrogatories Nos. 8 and 9; Exh. 4 at 50:21-51:13, 52:1-53:17, 148:21-152:4, Exh. 12.)  Defendant submitted evidence that Plaintiff testified that aside from one phone call with Johnson and Munari, he did not speak with anyone from Defendant’s business prior to purchasing the Property.  (Undisputed Separate Statement of Fact [“USSF”] 17; Decl. of Harris, Exh. 2 Form Interrogatory No. 17.1 at 27:7-20; Exh. 3 Special Interrogatory Nos. 10 and 12; Exh. 4 at 57:1-12, 86:11-12, 152:14-153:3.)  Defendant submitted evidence that Plaintiff entered into an agreement with Defendant to provide soil stabilization and added protection against future slippage.  (USSF 17; Decl. of Harris, Exh. 2 Form Interrogatory No. 17.1 at 27:7-20; Exh. 3 Special Interrogatory Nos. 10 and 12; Exh. 4 at 57:1-12, 86:11-12, 152:14-153:3.) (DSSF 18, 19; Decl. of Harris, Exh. 2 at Form Interrogatories Nos. 17.1 at 28:2-4, 50.1 at 32:6-14; Exh. 3 at Special Interrogatories Nos. 7 and 8; Exh. 4 at 52:1-53:17, 57:1-6, 86:1-6, 105:17-106:2, 107:12-14, 109:24-110:10, 112:24-113:20, 115:6-116:3, 117:2-25, 133:3-7, 152:14-153:5; Exh. 6; Decl. of Froelich ¶5, Exh. 6.)  Accordingly, Defendant met its burden on Issue 1, shifting the burden to Plaintiff to create a triable issue of material fact.

Plaintiff submitted evidence creating a triable issue of material fact as to whether Defendant, or anyone acting on Defendant’s behalf, made fraudulent statement(s) or material misrepresentation(s).  Specifically, Plaintiff submitted evidence that Defendant’s representative, Johnson, stated in an email in response to Munari’s October 22 email that, “[u]nder normal circumstances the earth takes about 10 years before water will reach beneath the polyurethane but the poly will last much longer. Because it is light weight it keeps the foundation stable longer.”  (DSSF 15; Decl. of Munari, Exh. 4.)  Plaintiff submitted evidence that Defendant’s conclusions that the Property’s foundation was stabilized or could have been stabilized through the injection of polyurethane resin beneath the foundation were false and could not have been reached without first conducting a field investigation.  (DSSF 18; Decl. of Hollingsworth ¶¶5-10.)  Plaintiff submitted evidence that the use of polyurethane grout injection is wholly inappropriate to stabilize the Property foundation, and disputes whether Defendant could reasonably have believed that the foundation had stabilized or could be stabilized with grout injections.  (DSSF 19; Decl. of Hollingsworth ¶¶5-10.)

Accordingly, Plaintiff has met its burden on summary adjudication as to Issue 1.  Defendant’s motion for summary adjudication as to Issue 1 of the 1st and 2nd causes of action is denied.

1. Whether Defendant is entitled to summary adjudication on the 1st and 2nd causes of action because Plaintiff cannot establish through admissible evidence any reliance upon any statements made by Defendant, or anyone acting on its behalf, which contradict the terms of the written agreement [Issue 2].

Defendant submitted evidence that Plaintiff’s decision to purchase the property was independent of and not reliant upon any statement, act, or representation made by or anyone acting on Defendant’s behalf, which contradict the terms of the written agreement. Specifically, Defendant submitted evidence of Plaintiff’s testimony that the Property’s “indescribable charm won [him] over,” which led him to make an offer on the Property.  (DSSF 20; Decl. of Harris, Exh. 4 at 64:6-65:22, 130:4-133:7; Exh. 6.)  Defendant submitted evidence that Plaintiff’s written agreement to perform work expressly excluded leveling the floors and lifting the house, rather Defendant was to provide soil stabilization and added protection against future slippage.  (USSF 17; Decl. of Harris, Exh. 2 Form Interrogatory No. 17.1 at 27:7-20; Exh. 3 Special Interrogatory Nos. 10 and 12; Exh. 4 at 57:1-12, 86:11-12, 152:14-153:3.) (DSSF 18, 19; Decl. of Harris, Exh. 2 at Form Interrogatories Nos. 17.1 at 28:2-4, 50.1 at 32:6-14; Exh. 3 at Special Interrogatories Nos. 7 and 8; Exh. 4 at 52:1-53:17, 57:1-6, 86:1-6, 105:17-106:2, 107:12-14, 109:24-110:10, 112:24-113:20, 115:6-116:3, 117:2-25, 133:3-7, 152:14-153:5; Exh. 6; Decl. of Froelich ¶5, Exh. 6.)  Accordingly, Defendant met its burden on Issue 2, shifting the burden to Plaintiff to create a triable issue of material fact.

Plaintiff submitted evidence creating a triable issue of material fact as to whether Defendant made representations on which Plaintiff relied.  Specifically, Plaintiff submitted evidence that Plaintiff reliance on the professionals involved in the transaction to provide him with accurate and truthful information to decide whether to purchase the Property, Plaintiff understood Defendant and Defendant’s representative Johnson to be experts in foundations, Defendant’s representative made assurances to Plaintiff that Defendant’s grout injection would ensure that the foundation was no longer moving, and without such an assurance, Plaintiff would not have purchased the Property or entered into the agreement with Defendant.  (DSSF 20; Decl. of Banham ¶¶4, 6-15, 17; Decl. of Carvalho, Exh. 1 at 47:1-22, 87:11-17, 133:8-134:16, 158:18-159:25; Decl. of Munari ¶¶13-17; Decl. of Hollingsworth ¶¶2-10.)

Accordingly, Plaintiff has met its burden on summary adjudication as to Issue 2.  Defendant’s motion for summary adjudication as to Issue 2 of the 1st and 2nd causes of action is denied.

Defendant’s motion for summary judgment is denied.

Dated:  December _____, 2022

Hon. Monica Bachner

Judge of the Superior Court