Judge: Nick A. Dourbetas, Case: 2021-01226145, Date: 2023-05-19 Tentative Ruling

1. Demurrer to Cross-Complaint
2. Motion for Sanctions
3. Case Management Conference

Motion No. 1:

Cross-Defendant Michael Nonahal’s Demurrer to the Mai Anh Tran aka Cindy Tran’s Cross-Complaint is OVERRULED as to the 2nd and 3rd causes of action as follows.

As to the 2nd and 3rd causes of action for misrepresentation and negligent misrepresentation, the Court finds the claims are sufficiently and particularly pled as required. Here, as to the misrepresentation cause of action, the Cross-Complaint alleges that “[i]n or around 5 years prior to this cross-complaint,” NONAHAL contacted TRAN to inquire whether she wanted to sell her property to him; that NONAHAL would contact her once every few months thereafter to ask whether she wanted to sell the property to him; that “[t]he entire time” NONAHAL represented he wanted to purchase the property for himself; that NONAHAL represented he was the owner of the vacant lot next to the property; that NONAHAL in text messages stated he was applying for the loan himself and needed TRAN to sign a letter to tell his lender so he could get approved; that NONAHAL told TRAN he was only informed for $730k; that NONAHAL stated his lender would not lock in the rate unless TRAN signed the agreement; that TRAN signed the agreement and did not initially see that TRAN was not the buyer; that NONAHAL intended to induce TRAN to enter into the agreement; that NONAHAL’s representations were all false; that TRAN does not live in the United States and has no knowledge of how real estate transactions are conducted in the United States; that TRAN’s reliance on the representations were reasonable; and that she sustained injury as a result of the misrepresentations. (See Cross-Complaint, ¶¶ 7-17, and 28-34.) Contrary to NONAHAL’s contentions, the Cross-Complaint does allege how and when the misrepresentations occurred, i.e., orally and in text messages and started 5-years prior to the filing of this Cross-Complaint in June 2022. The Cross-Complainant also alleges that she relied on NONAHAL’s representations because she does not live in the United States and does not know how real estate transactions are conducted. As to the allegation that NONAHAL misrepresented the value of the property, NONAHAL is correct that such representations are non-actionable. (See Graham v. Bank of America, N.A. (2014) 226 Cal.App.4th 594, 606 [“Statements regarding the appraised value of the property are not actionable fraudulent misrepresentations. Representations of opinion, particularly involving matters of value, are ordinarily not actionable representations of fact.”].) The Cross-Complaint, however, alleges other misrepresentations by NONAHAL. “A demurrer must dispose of an entire cause of action to be sustained.”  (Thompson v. Spitzer (2023) 307 Cal.Rptr.3d 183 (Ct. App. 2023), as modified on denial of reh'g (May 5, 2023).) “Thus, a court must overrule a demurrer to a cause of action if it is based on at least one viable theory of liability.” (Id.)

As to the negligent misrepresentation cause of action, it incorporates all prior allegations of the Cross-Complaint into it and is based on the same allegations as the intentional misrepresentation claim. (See Cross-Complaint, ¶¶ 35-40.) Because NONAHAL demurs on the same grounds as misrepresentation cause of action, the Court also OVERRULES the demurrer as to the negligent misrepresentation cause of action.

Motion No. 2:

Cross-Defendant Michael Nonahal’s (“NONAHAL”) Motion for Sanctions Pursuant to Code of Civil Procedure section 128.7 is DENIED as follows.

The Court finds NONAHAL failed to establish the filing of the Cross-Complaint against him which includes causes of action for misrepresentation and negligent misrepresentation was for an improper purpose or without legal or factual basis.

The evidence produced by NONAHAL does not negate or establish that her claims against NANAHAL for misrepresentation lack merit. TRAN contends that NANAHAL is the person who induced TRAN to sell the Property;  that there is direct evidence that NANAHAL was the sole communicator for the purchase of the Property and that SCHLITER’S name was never mentioned; that NANAHAL lied to TRAN; that NANAHAL told TRAN that he would lose his lack rate if TRAN did not sign the Agreement; that since this lawsuit was filed, TRAN obtained an appraisal for the Property which values it for $920,000; and that it was discovered that SCHLITER is nothing more than a straw buyer. (See Chang Decl., Exhibits 2, 4-9.) TRAN contends that but for NANAHAL’s representations she would not have agreed to sell the Property. “By statutory definition ‘frivolous means (A) totally and completely without merit or (B) for the sole purpose of harassing an opposing party.’ (§ 128.5, subd. (b)(2).)” (Finnie v. Town of Tiburon (1988) 199 Cal.App.3d 1, 12.) [C]ase law defines the term frivolous also in the alternative.

Accordingly, an action is deemed frivolous or in bad faith if it is prosecuted for improper motive (including harassment or delay) or if it is totally and completely devoid of any merit. [Citations omitted.] The standard of determining whether a lawsuit is frivolous is an objective one: a suit indisputably has no merit only ‘where any reasonable attorney would agree that the action is totally and completely without merit.’ [Citations omitted.]” (Finnie, supra, 199 Cal.App.3d at 12.) Here, the crux of TRAN’s contentions against NANAHAL is that his representations induced her to sell the Property and without his involvement she would never have sold the Property. “[A] cause of action based in fraud may arise from conduct that is designed to mislead, and not only from verbal or written statements.” (Tenet Healthsystem Desert, Inc. v. Blue Cross of California (2016) 245 Cal.App.4th 821, 839.) Further, there is “no statute or case law that compels an attorney to immediately investigate every item brought forth by the opposing party and then to dismiss an action if that evidence was less than absolutely compelling, or otherwise subject himself or herself to monetary sanctions for having filed or maintained a frivolous action.” (Talavera v. Nevarez (1994) 30 Cal.App.4th Supp. 1, 6.) “While abuse of the judicial process is never to be condoned or tolerated, ‘... public policy also favors the principles of zealous representation and freedom of access to the courts. [Citation.]’... To this end, ‘... an attorney needs only a reasonable and honest belief in the viability of each theory and the evidence supporting that theory, not a conviction his client will prevail, to justify filing a claim or defense. [Citation.]’” (Id.)

** CMC continued to 08/28/2023 at 9:00 a.m. **

Moving Party is to give notice of all the above.