Judge: Nathan Vu, Case: 30-2021-01236397, Date: 2022-10-24 Tentative Ruling

Please Note: The hearing on this matter has been changed to 8:30 A.M.

Demurrer

Defendant Mitch Fredericks’ Demurrer to the Second Amended Complaint is OVERRULED.

Defendant Mitch Fredericks’ Request for Judicial Notice is GRANTED. (See Arce v. Kaiser Foundation Health Plan, Inc. (2010) 181 Cal.App.4th 471, 485 [court may take judicial notice of discovery responses when they cannot reasonably be controverted].)

Defendant Mitch Fredericks demurs to the Second Amended Complaint (SAC) filed by Plaintiffs Michael and Carrie Mancinelli.

Demurring After Answering

Civil Procedure Code section 430.41(b) states:

A party demurring to a pleading that has been amended after a demurrer to an earlier version of the pleading was sustained shall not demur to any portion of the amended complaint, cross-complaint, or answer on grounds that could have been raised by demurrer to the earlier version of the complaint, cross-complaint, or answer.

Plaintiffs contend that Section 430.41(b) bars this demurrer because Defendant Fredericks filed an answer, rather than a demurrer, to the original Complaint and the allegations against Defendant Fredericks have not been amended since the original Complaint.

However, this demurrer relies on discovery responses from Plaintiffs that were provided after the filing of the original Complaint and the First Amended Complaint (FAC). Thus, Defendant Fredericks could not have brought this demurrer previously, against either the original Complaint or the FAC. The demurrer is not prohibited by Section 430.41(b).

Standard for Demurrer

In ruling on a demurrer, a court must accept as true all allegations of fact contained in the complaint. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) A demurrer challenges only the legal sufficiency of the affected pleading, not the truth of the factual allegations in the pleading or the pleader’s ability to prove those allegations. (Cundiff v. GTE Cal., Inc. (2002) 101 Cal.App.4th 1395, 1404-05.)

Questions of fact cannot be decided on demurrer. (Berryman v. Merit Prop. Mgmt., Inc. (2007) 152 Cal.App.4th 1544, 1556.) Because a demurrer tests only the sufficiency of the complaint, a court will not consider facts that have not been alleged in the complaint unless they may be reasonably inferred from the matters alleged or are proper subjects of judicial notice. (Hall v. Great W. Bank (1991) 231 Cal.App.3d 713, 718 fn.7.)

Although courts should take a liberal view of inartfully drawn complaints, (see Civil Proc. Code, § 452), it remains essential that a complaint set forth the actionable facts relied upon with sufficient precision to inform the defendant of what plaintiff is complaining, and what remedies are being sought, (Leek v. Cooper (2011) 194 Cal.App.4th 399, 413). Bare conclusions of law devoid of any facts are insufficient to withstand demurrer. (Schmid v. City and County of San Francisco (2021) 60 Cal.App.5th 470, 481; see Civil Proc. Code, § 425.10, subd. (a).)

1st Cause of Action (Fraud – Concealment)

The SAC alleges that Defendant Fredericks committed fraud by concealment when he failed to disclose the mold issues in the subject property to the Plaintiffs even though he was aware or should have been aware of those issues. (See SAC, ¶¶ 36-45.)

The elements of a cause of action for fraudulent concealment are: (i) concealment or suppression of a material fact; (ii) by a defendant with a duty to disclose the fact to the plaintiff; (iii) defendant’s intent to defraud plaintiff by intentionally concealing or suppressing the fact; (iv) plaintiff was unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact; and (v) as a result, the plaintiff sustained damage. (Hambrick v. Healthcare Partners Medical Group, Inc. (2015) 238 Cal.App.4th 124, 162; see also Civil Code, § 1573.)

Generally, a home inspector must “conduct a home inspection with the degree of care that a reasonably prudent home inspector would exercise.” (Business & Prof. Code, § 7196.)

Defendant Fredericks asserts that he did not owe a duty to the Plaintiffs to disclose the presence of mold pursuant to the Uniform Building Inspection Report for the subject property (Report). The Plaintiffs produced the Report in discovery and Defendant Fredericks seeks judicial notice of the Report.

Defendant Fredericks argues that the Report specifically excludes mold as part of the inspection: “The following are NOT included in the inspection: . . . The examination of conditions related to animals, rodents, insects, wood destroying insects, organisms, mold and mildew, or the damage caused thereby . . . .” (Request for Jud. Not., Exh. 1 at p. 3.)

However, the Report is not an agreement but a unilateral disclaimer by Defendant Fredericks. The Report does not show that the Plaintiffs agreed that Defendant Fredericks had no duty to disclose.

But even if the Report were a contract, “[c]ontractual provisions that purport to waive the duty owed pursuant to Section 7196, or limit the liability of the home inspector to the cost of the home inspection report, are contrary to public policy and invalid.” (Business & Prof. Code, § 7198.) A home inspector may be sued in tort for the negligent failure to disclose material defects in a home. (Leko v. Cornerstone Building Inspection Service (2001) 86 Cal.App.4th 1109.)

In light of Section 7198, the Report’s attempt to disclaim any responsibility to waive a duty owed pursuant to Section 7196 is invalid.

2nd Cause of Action (Intentional Misrepresentation)

The elements of fraud by misrepresentation are: (1) a misrepresentation; (2) knowledge of its falsity; (3) intent to induce reliance on the misrepresentation; (4) justifiable reliance on the misrepresentation; and (5) resulting damages. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.)

Defendant Fredericks contends that the second cause of action for intentional misrepresentation fails because 1) Plaintiffs’ discovery responses contradict their allegation that they relied on the Report in purchasing the subject property, and 2) Plaintiffs’ alleged reliance was not reasonable.

With respect to the first contention, Defendant Fredericks asked Plaintiffs to admit that they read the Report before purchasing the residence. Plaintiffs responded that they “cannot recall if [they] read all of [the Report] before purchasing the subject property.” (Request for Jud. Not., Exhs. 3 & 5.) Plaintiffs’ discovery responses that they cannot recall if they read “all” of the Report prior to purchasing the subject property does not necessarily mean that Plaintiffs did not rely on the Report in purchasing the property.

With respect to the second contention, “the question of whether reliance is justifiable is one of fact. But the issue may be decided as a matter of law if reasonable minds can come to only one conclusion based on the facts.” (Hoffman v. 162 North Wolfe LLC (2014) 228 Cal.App.4th 1178, 1194, internal quotation marks and citations omitted.)

Defendant Fredericks contends that, because the Report expressly excludes mold, Plaintiffs could not have justifiably relied on the Report. As discussed previously, however, Business and Professions Code section 7198 prohibits such limitations. Thus, the court cannot conclude that “reasonable minds can come to only one conclusion” regarding the reasonableness of Plaintiffs’ reliance on the Report.

4th Cause of Action (Negligence)

The elements of a cause of action for negligence are: (i) the defendant owed a duty to the plaintiff; (ii) the defendant breached that duty; (iii) the breach was the proximate cause of harm to the plaintiff; and (iv) the plaintiff suffered damages. (Huggins v. Longs Drug Stores Cal., Inc. (1993) 6 Cal.4th 124, 151.)

Defendant Fredericks contends that the fourth cause of action for negligence fails because he did not have a duty to disclose any mold issues.

As discussed previously, however, Defendant Fredericks had a non-waivable duty to “conduct a home inspection with the degree of care that a reasonably prudent home inspector would exercise.” (Business & Prof. Code, § 7196.)

Plaintiffs shall give notice of this ruling.