Judge Ralph C. Hofer, Case 22GDCV00048 2022-07-29 Tentative Ruling

that defendant Alen Bejanyan is the purported owner of property and a residence located on Dublin Drive in Glendale, which plaintiffs have rented from defendant since February of 2019. Plaintiffs allege that on August 1, 2021, plaintiffs and defendant entered into an agreement for plaintiffs’ purchase of the subject property and pre-paid rents, pursuant to which rent for one year was to be paid in advance in the amount of $5,000 per month, with the first month free if paid in cash, and plaintiffs would receive an option to purchase in exchange for a cash payment of $5,000, with the total sale price of the subject property to be $1,650,000.

Plaintiffs allege that they paid defendant $60,000 in cash, consisting of eleven months rent at $5,000 per month and $5,000 cash as consideration for plaintiffs’ option to purchase the subject property, receipt of which was acknowledged by landlord in the Lease. The Lease specified that the Lease was for the time period August 1, 2021 to July 31, 2025, and that the time period for plaintiffs to exercise the option to purchase ran from August 1, 2021 until July 31, 2022.

The complaint alleges that on August 5, 2021, defendant served a 60-Day Notice to Quit on plaintiffs, which did not specify any cause for termination, including the statutorily required just cause pursuant to Civil Code section 1946.2 or Glendale Municipal Ordinance section 9.30.031. In December of 2021, defendant filed an unlawful detainer lawsuit against plaintiffs,

Plaintiffs allege that on January 14, 2022, plaintiffs notified defendant that plaintiffs were exercising their option to purchase the subject property, but defendant has refused to enter escrow and honor the agreement between the parties and is attempting to sell the subject property to another for a higher price. The complaint alleges causes of action for breach of contract, promissory fraud, and quiet title.

Defendant Bejanyan has filed a cross-complaint against plaintiffs as cross-defendants, alleging that in February of 2019 cross-defendants rented the subject house in Glendale for the agreed upon sum of $5,000 per month and entered a written agreement to live in the house for 2 ½ years, until August 2021.

The operative cross-complaint, the First Amended Cross-Complaint (“FACC”) alleges that beginning in January of 2021 and then in April of 2021, cross-defendants negotiated with cross-complainant for an option to purchase the subject house. Cross-complainant alleges that he offered the cross-defendants an option to purchase the house for a set option fee of $150,000 with a purchase price of $1,650,000, but that cross-defendants refused to pay the option fee in February of 2021 and again in April of 2021. The FACC alleges that cross-complainant requested the $150,000 in order to put a down payment down for another house for his family, since in September 2021 he and his family intended to move back to America from abroad. The FACC alleges that the parties never reached an agreement regarding the option fee and price of the house.

The FACC alleges that the parties restarted negotiations regarding the purchase of the house on July 4, 2021, with cross-complainant stating the new price of the house would be $1,900,000, and that the parties again did not reach agreement.

On August 5, 2021, cross-defendants were served with the 60-Day Notice to Vacate and a 3-Day Notice to Pay Rent, as cross-defendants failed to pay the rent for the month of August. The FACC alleges that as cross-defendants never paid the requested $150,000 option fee, the parties never came to an agreement as to the final price of the house, and that cross-complainant never received any money from cross-defendants after July 6, 2021, after the last rent paid for the month of July 2021.

Cross-complainant alleges that he never signed any document regarding the sale of the house, but that the documents relied upon by cross-defendants are fraudulent, and cross-complainant’s signature on those documents is forged, and that cross-complainant first became aware of the Lease Agreement when it was produced by cross-defendants in response to the UD lawsuit filed by cross-complainant, and first became aware of the Residential Purchase Agreement when cross-complainant received a call from Glenoaks Escrow Company that there had been an escrow opened on the house.

The file shows that on January 27, 2022, the court heard an ex parte application filed by plaintiffs for, among other relief, an order to deem matters related. The application was granted, the court finding that this case is related to the UD action 21PUD01291, deeming this case the lead case, ordering the cases assigned to Department D, and ordering a stay in the UD case pending resolution of the lead case. The court noted that the “parties may file a stipulation to consolidate cases.” On May 9, 2022, the court at a case management conference indicated that counsel’s joint motion to consolidate the related cases was heard and granted. The minute order also states, “Later, after further consideration, the Court vacates the order consolidating cases 21PDUD01291 AND 22GDCV00048. Cases are ordered unconsolidated.”

To plead a cause of action for breach of contract, plaintiff must plead the following elements: Contract formed, and terms alleged verbatim or according to legal effect; plaintiff’s performance or excuse for nonperformance; defendant’s breach; and damage to plaintiff. Walsh v. Standart (1917) 174 Cal. 807; 4 Witkin, California Procedure (5th Ed.) Pleading, §515.

The FACC does not specify the nature of the “rental contract” relied upon in the breach of contract cause of action. [FACC, para. 10]. However, the general allegations include an allegation that, “The parties executed a written agreement wherein the Cross Defendants agreed to pay Cross Complainant the $5,000 per month in exchange for the right to live in the House, for 2-1/2 years until August, 2021.” [FACC, para. 3]. This allegation is realleged in the first cause of action. [FACC, para. 9].

It should be clarified in the cause of action that the “rental agreement” at issue is the “written agreement” referenced in paragraph 3, or some other agreement, as the cause of action alleges that the August 1, 2021 payment was not made, and that payments have not been made since August 1, 2021, but evidently the contract only ran through August of 2021.

In addition, to the extent cross-complainant intends to rely on the subject written agreement, under such circumstances it is required that a copy of the written contract be attached to the pleading, or the terms set forth verbatim. Otworth v. Southern Pacific Transportation Co. (1985) 166 Cal.App.3d 452, 459. In Otworth, the Second District stated:

Cross-defendants also argue that the cause of action improperly seeks the same remedy being sought in the related UD action, in which the remedy was waived. Cross-defendants submit a Request for Judicial Notice of various documents, without attaching copies of those documents. [See RFJN]. Under Evidence Code § 452 (d), judicial notice may be taken of “Records of (1) any court of this state…”

Under Evidence Code §453, the trial court can take judicial notice of a matter specified in Section 452 if a party requests it and (1) gives each adverse party sufficient notice of the request “to enable such adverse party to prepare to meet the request” and (2) “Furnishes the court with sufficient information to enable it to take judicial notice of the matter.”

The opposition argues that cross-complainant in opposition has not addressed the demurrer to this cause of action, so the demurrer should be sustained without leave to amend. The court will discuss at the hearing whether cross-complainant by failing to respond to the demurrer to this cause of action intends to withdraw the cause of action, but will otherwise permit one opportunity to amend, if possible.

To state a cause of action for fraud, a party must plead the following elements: A false representation, actual or implied, or concealment of a matter-of-fact material to the transaction which defendant had a duty to disclose, or defendant’s promise made without intention to perform; defendant’s knowledge of the falsity; defendant’s intent to deceive; plaintiff’s justifiable reliance thereon; and resulting damage to plaintiff. Pearson v. Norton (1964) 230 Cal.App.2d 1.

Cross-defendants argue that the cause of action is not alleged with sufficient specificity. It does appear that the pleading alleges that both cross-defendants made representations to cross-complainant, without specifying which of the two cross-defendants made any representation, and it is not alleged where or by what means (oral or written) any representations were made. The opposition argues that the representation is alleged at paragraph 12, which alleges, in pertinent part, “Cross-Defendants simply stated they would remain as tenants in the House and pay the $5,000 per month rental.” [FACC, para. 12]. This allegation is not sufficiently specific and is not specific as to each cross-defendant.

Cross-defendants also argue that the pleading fails to sufficiently allege a present fact, as opposed to a future fact, or reliance or damages. The cause of action appears to attempt to allege fraud based on a false promise theory. The cause of action includes an allegation that “Cross-Defendants did not intend to pay any further rent to Cross-Complainant after July 6, 2021.” [Para. 12 (c)]. This allegation is sufficient to allege a false promise theory, and it is further alleged that cross-complainant relied on the representation to his detriment as “he did not receive any monthly rent payments after July 6, 2021,” and that this conduct, among other conduct, has resulted in “damages to be proved at trial.” [FACC, para. 13]. The demurrer accordingly is overruled on these grounds but is sustained based on lack of specificity.

“Any person interested under a written instrument, excluding a will or a trust, or under a contract, or who desires a declaration of his or her rights or duties with respect to another, or in respect to, in, over or upon property,... may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court for a declaration of his her rights and duties in the premises, including a determination of any question of construction or validity arising under the instrument or contract. He or she may ask for a declaration of rights or duties, either alone or with other relief; and the court may make a binding declaration of these rights or duties, whether or not further relief is or could be claimed at the time. The declaration may be either affirmative or negative in form and effect, and the declaration shall have the force of a final judgment. The declaration may be had before there has been any breach of the obligation in respect to which said declaration is sought.”

“A complaint for declaratory relief is sufficient if it sets forth facts showing the existence of an actual controversy relating to the legal rights and duties of the parties... and requests that the rights and duties be adjudged by the court.”

Cross-defendants argue that the cause of action is insufficient because it fails to allege factual allegations with respect to the duties of the parties to each other under a deed, will or other written instrument, or under a contract, under CCP section 1060. As set forth above, the statute expressly permits such a declaration to be sought concerning the rights or duties of parties, “in respect to, in, over or upon property…” In any case, the declaratory relief cause of action concerns the rights to the “House,” as well as concerning the “contract” which cross-complainant claims he never signed and requests be declared invalid, null and void. [FACC, paras. 17, 18]. The pleading sufficiently alleges a controversy between the parties and seeks a declaration of duties and rights. [FACC, paras. 16-18, Prayer, para. 3]. The demurrer on this ground accordingly is overruled.

Moreover, the duplicative argument advanced by cross-defendants is not currently listed as a ground to sustain a demurrer under CCP § 430.10. See Blickman Turkus, LP v. MF Downtown Sunnydale, LLC (2008) 162 Cal.App.4th 858, 890 (“This is not a ground on which a demurrer may be sustained.”) The demurrer to the third cause of action accordingly is overruled.

Demurrer is SUSTAINED WITH LEAVE TO AMEND to the first cause of action for breach of contract on the ground it cannot be clearly ascertained from the cause of action itself whether the alleged contract is written, oral, or implied by conduct. If cross-complainant intends to rely on the alleged written agreement referenced in the general allegations at paragraph 3, on amendment cross-complainant must directly allege such a fact in the cause of action itself. In addition, the writing must be attached to the pleading, or the written terms alleged verbatim or according to legal effect, and, if no writing is attached to the pleading, it must be explained why a copy of the written agreement is not attached to the pleading. If the agreement is not written, the nature of the agreement must be specified, and the material terms must be sufficiently specifically alleged.

The Court notes that cross-complainant in opposition to the demurrer has not responded to the demurrer to this cause of action. The Court will hear argument from cross-complainant with respect to whether cross-complainant intends to withdraw or abandon this cause of action, or whether leave to amend should be permitted.

Demurrer is SUSTAINED WITH LEAVE TO AMEND to the second cause of action for fraud on the ground the cause of action is not alleged with sufficient specificity. See Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73 (pleading party must allege specifically how, what, where, to whom and by what means a defendant made a misrepresentation). Particularly here, where there is more than one cross-defendant, the pleading must specify which cross-defendant made what representation in the required detail, including when, where and by what means (oral, written) each cross-defendant made what representation.

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