Judge Olivia Rosales, Case 21NWCV00285 2022-07-28 Tentative Ruling

Judge: Olivia Rosales, Case: 21NWCV00285, Date: 2022-07-28 Tentative Ruling

Case Number: 21NWCV00285 Hearing Date: July 28, 2022 Dept: SEC

DIAZ v. OWENS

CASE NO.: 21NWCV00285

HEARING: 07/28/22

JUDGE: OLIVIA ROSALES

TENTATIVE ORDER

Defendants ESCROW TODAY, INC., and DALIA GODINEZ’s Demurrer to Plaintiffs’ First Amended Complaint is SUSTAINED with 20 days leave to amend.

Moving Party to give notice.

This action was filed by Plaintiffs LAZARO W. DIAZ and JESSICA M. HERNANDEZ (in pro per) (collectively “Plaintiffs”) against Defendants TIFFANY M. OWENS (“Owens”); ESCROW TODAY, INC. (“ESI”); and DALIA GODINEZ (“Dalia”) on May 6, 2021. On April 8, 2022, the operative First Amended Complaint (“FAC”) was filed.

The FAC alleges, in pertinent part: “Lazaro W. Diaz (hereafter ‘Lazaro’) opened escrow #87327-DA with ESCROW TODAY, INC. (hereafter ‘ETI’) on August 3, 2020, for the purchase of real property described as: 919 Grace Street, Bakersfield, CA 93305 (hereafter ‘The Property’).” (FAC ¶15.) “On August 5, 2020, Dalia Godinez (hereafter ‘Dalia’), ETI’s escrow officer in charge of the purchase transaction for The Property, sent Lazaro wire instructions for the initial five-thousand-dollar ($5,000.00) deposit. Lazaro subsequently wired five-thousand-dollars ($5,000.00) to ETI’s trust account. Thereafter, between August 5, 2020 and November 18, 2020 Lazaro was subjected to the standard mortgage process.” (FAC ¶16.) “On November 19, 2020, at 7:23am, Dalia sent Lazaro an email message with the following statement: ‘I will send wire instructions.’” (FAC ¶17.) “On November 19, 2020, Minutes after sending his last message to Dalia, Lazaro received wire instructions for $84,000.00 from an email (escrowtitleagentt@gmail.com) which contained, within the body of the email, ETI’s logo, name and address. The email also introduced Tiffany M. Owens as the attorney for ETI.” (FAC ¶19.) “In accordance with the instructions listed in the ‘Wire Fraud and Electronic Funds Transfer Advisory’ section within the Purchase Agreement, that same day, at approximately 12:37pm, after receiving the email with the wire instructions, Dalia called and spoke to Jessica to confirm the amount of closing funds and the wire instructions; Dalia confirmed the amount was $84,000.00 and stated that the actual wire instructions had been emailed to Lazaro earlier that morning.” (FAC ¶20.) “While at the Wells Fargo bank branch, Jessica called and spoke to Dalia five times between 3:03pm and 3:28pm to verify information provided earlier that morning within the wiring email. Information such as the account number to where the wired funds would be going. Based on Dalia’s representations, made by phone, to Jessica, Jessica followed the emailed wire instructions, to the letter, and wired the $84,000.00 to the account provided within the email and confirmed by Dalia.” (FAC ¶22.) “On November 25, 2020, Jessica called ETI to confirm receipt of the $84,000.00 which was wired November 19, 2020 from Lazaro and Jessica via Wells Fargo Bank to ETI, however, an ETI representative informed Jessica that ETI had not received the funds. Shortly thereafter that same day, Jessica received an email from ETI’s CEO, Genienne Gastelum, confirming that ETI had not received the funds.” (FAC ¶23.) “Lazaro and Jessica Filed a complaint with the Department of Financial Protection and Innovation (DFPI). ETI responded to the complaint with false and deceiving information. Specifically stating that, upon the opening of escrow, Lazaro and Jessica received and signed a wire alert document that mentioned that the original wire instructions were the ONLY instructions they would receive. However, said document was presented to Lazaro and Jessica only after the $84,000.00 were wired on November 23, 2020. In addition, they claimed that Lazaro and Jessica failed to contact Dalia to confirm the information in the wire instructions which is FALSE.” (FAC ¶25.) “Plaintiffs allege that defendant Dalia, through her position at ETI, initiated the scheme by creating confusion and chaos to induce the Plaintiffs to follow the fraudulent instructions and send their hard earned funds to a fake attorney’s (defendant Tiffany) Wells Fargo account).” (FAC ¶26.) “After providing information/proof about the circumstances that led them to visit their branch, a banker at [the Wells Fargo branch located in Arizona] provided Lazaro and Jessica with a copy of the account activity from the account where the 84,000.00 was credited to, which happened to be Tiffany’s account.” (FAC ¶29.)

The FAC asserts the following causes of action: (1) Conversion (against Owens and Dalia); (2) Breach of Contract (against ETI and Dalia); (3) Breach of Implied Covenant of Good Faith and Fair Dealing (against ETI and Dalia); (4) Fraud and Fraudulent Misrepresentation (against all Defendants); (5) Negligence (against ETI and Dalia); (6) Negligent Misrepresentation (against all Defendants); (7) Intentional Interference with Economic Advantage (against Owens and Dalia); (8) Negligent Interference with Economic Advantage (against Owens and Dalia); (9) Tortious Interference with Contract (against Owens and Dalia); (10) Breach of Fiduciary Duty (against ETI and Dalia); (11) Unjust Enrichment (against Owens and Dalia); and (12) Specific Recovery of Property (against Owens and Dalia).

Defendants ETI and Dalia (collectively “Escrow Defendants”) specially and generally demur to the first, second, third, and twelfth causes of action.

First Cause of Action – Conversion (as to Dalia)

The elements of a cause of action for conversion are: (1) Plaintiff’s ownership or right to possession of personal property; (2) defendant’s disposition of the property inconsistent with plaintiff’s rights; and (3) resulting damages. (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 119.)

The Escrow Defendants argue that this cause of action fails as to Dalia because Plaintiffs do not allege that Dalia ever exercised dominion or control over Plaintiffs’ property— the purportedly converted funds, and thus, did not convert the subject property.

A plaintiff is not required to allege or prove that the defendant applied the property in question to his or her own use or benefit, so longs as the plaintiff shows an assumption of control or ownership of the property inconsistent with the plaintiff’s possessory or ownership rights. (Igauye v. Howard (1952) 114 Cal.App.2d 122.)

Here, the facts do not allege that Dalia ever received the subject escrow funds, or that Dalia ever asserted any ownership or possession over the subject escrow funds.

The demurrer to the first cause of action as to DALIA is sustained with 20 days leave to amend.

Second Cause of Action – Breach of Contract (as to ETI and Dalia)

Whether it is written, oral, or implied, the elements of a cause of action for breach of contract are as follows: (1) the existence of a contract; (2) Plaintiff’s performance or excused non-performance; (3) Defendants’ breach; and (4) resulting damage to Plaintiff. (Reichert v. General Ins. Co. (1968) 68 Cal.2d 822, 830.) “If an action is based on a breach of written contract, the terms must be set forth verbatim in the body of the complaint or a copy of the contract must be attached and incorporated by reference.” (Id. at 459.) Alternatively, if the claim is based on a written contract, then “a plaintiff may plead the legal effect of the contract rather than its precise language.” (Construction Protective Services, Inc. v. TIG Specialty Ins. Co., (2002) 29 Cal.4th 189, 198-199.)

Plaintiffs allege that “Defendants [ETI and Dalia] breached the terms of their agreement by, among other things, failing to property take the appropriate steps to prevent fraud as they promised to do and failing and refusing to pay Plaintiffs the amount due thereunder pursuant to ¶7 of the ‘General Provisions’.” (FAC ¶35.) The Court finds that Plaintiffs have not adequately alleged the terms of the purported Agreement between Plaintiffs and the Escrow Defendants. The Agreement is not attached as an exhibit to the Complaint, the material terms of the Agreement are not incorporated by reference, and the legal effect of the contract are not alleged. Rather, Plaintiffs attach an Agreement containing Additional/Supplemental Escrow Instructions acknowledged by the Sellers and Buyers.

The demurrer to the second cause of action is SUSTAINED with 20 days leave to amend on the basis of uncertainty as to ETI and Dalia.

Third Cause of Action – Breach of Implied Covenant of Good Faith and Fair Dealing (as to ETI and Dalia)

Any claim for breach of the implied covenant of good faith and fair must be tied to alleged breaches of express contractual provisions. (Pasadena Live v. City of Pasadena (2004) 114 Cal. App. 4th 1089, 1094.) This claim fails for the same reason as the breach of contract claim. The demurrer to the third cause of action is SUSTAINED with 20 days leave to amend as to ETI and Dalia.

Twelfth Cause of Action – Specific Recovery (against ETI and Dalia)

The Court is unaware of any cause of action for “specific recovery.” However, “[t]o obtain a specific performance after a breach of contract, a plaintiff must generally show: (1) the inadequacy of his legal remedy; (2) an underlying contract that is both reasonable and supported by adequate consideration; (3) the existence of a mutuality of remedies; (4) contractual terms which are sufficiently definite to enable the court to know what it is to enforce; and (5) a substantial similarity o the requested performance to that promised in the contract.” (Real Estate Analytics, LLC v. Vallas (2008) 160 Cal.App.4th 463, 472.) Those facts are not alleged here. The demurrer is SUSTAINED with 20 days leave to amend as to ETI and Dalia.