Judge: Richard S. Whitney, Case: 37-2022-00010111-CU-BC-CTL, Date: 2023-10-20 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - October 19, 2023

10/20/2023  10:30:00 AM  C-68 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Richard S. Whitney

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Civil - Unlimited  Breach of Contract/Warranty Demurrer / Motion to Strike 37-2022-00010111-CU-BC-CTL KHOURI VS AJX HOMES LLC [IMAGED] CAUSAL DOCUMENT/DATE FILED:

TENTATIVE RULING: DEFENDANTS AJX HOMES, LLC, GOLIATH INVESTMENTS, LLC and LILLIAN TRUJILLO'S DEMURRER TO FIRST AMENDED COMPLAINT ('FAC') is OVERRULED.

Defendants AJX HOMES, LLC ('AJX'), GOLIATH INVESTMENTS, LLC ('GOLIATH') and LILLIAN TRUJILLO ('TRUJILLO') (collectively 'Defendants') challenge Plaintiff SHADIA KHOURI's ('Plaintiff') fourth (fraud), seventh (intentional interference with prospective economic relations) and eighth (conspiracy) causes of action in the FAC.

Defendants assert the FAC fails to allege the names of the persons who made the representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written. They also assert no representations are alleged to have been made by TRUJILLO. '[T]he elements of an action for fraud and deceit based on concealment are: (1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.' (Lovejoy v. AT&T Corp. (2001) 92 Cal.App.4th 85, 96 [Citation omitted].) Fraud must be plead with particularity; however, such rule of particularity is harder to apply to a case of simple nondisclosure. 'How does one show 'how' and 'by what means' something didn't happen, or 'when' it never happened, or 'where' it never happened?' ... One of the purposes of the specificity requirement is 'notice to the defendant, to 'furnish the defendant with certain definite charges which can be intelligently met.' ' (Committee on Children's Television, Inc. v. General Foods Corp., supra, 35 Cal.3d 197, 216, 197 Cal.Rptr. 783, 673 P.2d 660.) Less specificity should be required of fraud claims 'when 'it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy,' ...

(Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1384–1385.) Here, Plaintiff alleges AJX's Managing Member, TRUJILLO, signed an offer to purchase Plaintiff's property for $420,000 and that AJX's agent Niko Castilleja recommended Plaintiff use Defendants ALINA HOFSTEDT ('HOFSTEDT') and HOMESMART REALTY WEST ('HOMESMART') as Plaintiff's real estate agent. (FAC, ¶ 14.) Plaintiff followed the recommendation, and a listing agreement was Calendar No.: Event ID:  TENTATIVE RULINGS

2977380 CASE NUMBER: CASE TITLE:  KHOURI VS AJX HOMES LLC [IMAGED]  37-2022-00010111-CU-BC-CTL signed. (FAC, ¶ 15.) 'Hofstedt recommended to list the Property at a 'Value Range Pricing' of $399,000 to $449,000 through November 8, 2019, with a 5% commission to HomeSmart.' (FAC, ¶ 16.) Just days after rejecting AJX's offer 'Hofstedt presented an offer from Goliath to Plaintiff to purchase the Property for $440,000. The offer was non-contingent, all-cash, and signed by Trujillo on behalf of Goliath.' GOLIATH 'was represented in the purchase by HomeSmart and Molina.' (FAC, ¶ 18.) Plaintiff received multiple offers around the same time, some for more than $440,000, but HOFSTEDT did not recommend any of them and instead assured Plaintiff 'Goliath's offer was the 'best' and encouraged her to accept it.' (FAC, ¶ 19.) 'Plaintiff was confused by Hofstedt's failure to proactively counter the various offers and/or create a 'bidding war'. Plaintiff was also confused as to why Hofstedt was marketing the Property as a three-bedroom home, when it was in fact a four-bedroom home. However, since Plaintiff was unfamiliar with the process, she deferred to the expertise of Hofstedt.' (FAC, ¶ 20.) 'Based on Hofstedt's recommendation, and with a slight increase to ensure that Plaintiff received a net amount of $420,000 from the sale after the deduction of commissions, Plaintiff accepted a marginally improved offer of $442,500 from Goliath for the Property.' (FAC, ¶ 21.) Not long after the sale, 'the Property was listed again by HomeSmart, on behalf of Goliath, in substantially the same condition, for $529,000 ... The Property was not upgraded, it was not 'flipped', it was not improved. It was simply re-listed as a four-bedroom home, at the market value, and the San Diego real estate market was allowed to compete for the purchase.' (FAC, ¶ 22.) 'A little over sixty days between Hofstedt marketing the Property as a three-bedroom home for $399,000 to $449,000, recommending to Plaintiff a purchase price of $440,000, and closing a transaction for $442,500 on behalf of Plaintiff (as seller), Hofstedt closed the subsequent transaction on the Property, on behalf of Goliath, for almost 20% more.' (FAC, ¶ 23.) Plaintiff summarizes the acts and omissions to support fraud as: (i) failing to perform on the Agreement in good faith; (ii) failing to seek and achieve the maximum value and sale price for the Property; (iii) failing to present any and offers on the Property to Plaintiff; (iv) failing to honor their duty owed to Plaintiff; (v) failing provide notice to Plaintiff of any and all conflicts (actual and potential) on the sale of the Property; and (vi) conspiring with each other to engage in the asserted conduct (to Plaintiff's detriment).' (FAC, ¶ 51.) Plaintiff alleges she 'relied upon Hofstedt and HomeSmart's promise to value and market the Property to acquire the best possible price.' (FAC, ¶ 25.) As discussed below, Plaintiff has sufficiently alleged facts to support a conspiracy. Therefore, it is unnecessary for Plaintiff to allege a misrepresentation and/or omission on the part of each moving defendant. As to the particularity requirement, the Court agrees this is a case where the requirements should be relaxed given that Defendants must necessarily possess full information concerning the facts of the controversy. The Court finds the allegations, read as a whole, are sufficient to support fraud against Defendants. The demurrer is overruled as to fraud.

Next, Defendants argue the allegations fail to allege an existing relationship to support the seventh cause of action for intentional interference with prospective economic relations. '[A]n essential element of the tort of intentional interference with prospective business advantage is the existence of a business relationship with which the tortfeasor interfered.' [Citation] Although this need not be a contractual relationship, an existing relationship is required.' (Roth v. Rhodes (1994) 25 Cal.App.4th 530, 546 [Citation omitted].) Plaintiff alleges 'there were multiple other offers to purchase the Property from a series of interested buyers,' but she did not accept them based on HOFSTEDT's assurance that the offer from GOLIATH was the best. The Court finds that offers received from other potential buyers were sufficient to establish business relationships with which Defendants could interfere. For purposes of this demurrer, the Court finds that an existing business relationship was created when the potential buyers made offers to purchase the property. The demurrer is overruled as to the seventh cause of action.

Finally, Defendants assert the conspiracy cause of action fails. '[A] conspiracy does no harm and engenders no tort liability. It must be activated by the commission of an actual tort.' (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 511.) 'To prove a claim for civil conspiracy, Calendar No.: Event ID:  TENTATIVE RULINGS

2977380 CASE NUMBER: CASE TITLE:  KHOURI VS AJX HOMES LLC [IMAGED]  37-2022-00010111-CU-BC-CTL [plaintiff] was required to provide substantial evidence of three elements: (1) the formation and operation of the conspiracy, (2) wrongful conduct in furtherance of the conspiracy, and (3) damages arising from the wrongful conduct. (3) As is well established, civil conspiracy is not an independent tort.' (Kidron v. Movie Acquisition Corp. (1995) 40 Cal.App.4th 1571, 1581.) 'The conspiring defendants must also have actual knowledge that a tort is planned and concur in the tortious scheme with knowledge of its unlawful purpose.' (Id. at 1582.) 'However, actual knowledge of the planned tort, without more, is insufficient to serve as the basis for a conspiracy claim. Knowledge of the planned tort must be combined with intent to aid in its commission.' (Id.) 'It is well settled that a conspirator is liable for all the acts done in furtherance of a common scheme or plan even though he is not a direct actor. [Citation] It is equally well settled that a party may be liable even if the intentional tort is commenced before he participates, if he, knowing the facts, then participates therein.' (Peterson v. Cruickshank (1956) 144 Cal.App.2d 148, 168 [Citation omitted].) Defendants assert the allegations are insufficient because Plaintiff did not allege the 'formation and operation of the conspiracy' and 'wrongful conduct' committed by Defendants. However, Plaintiff alleges 'Defendants acted in concert and came to a mutual understanding to accomplish the common and unlawful plan and that one of them, or all of them, committed an overt act to further it. Defendants were aware that the other defendants (and others) planned to make intentional misrepresentations, negligent misrepresentations, contractual breaches, breaches of fiduciary duties, and intentional interference with prospective economic relations.' (FAC, ¶ 80.) Plaintiff also alleges 'Defendants agreed with the other defendants (and others) and intended that the intentional misrepresentations, negligent misrepresentations, contractual breaches, breaches of fiduciary duties, and intentional interference with prospective economic relations, be committed.' (FAC, ¶ 81.) Finally, Plaintiff incorporated all of the allegations as to fraud.

The Court finds the above allegations are sufficient as to the formation of a conspiracy. As discussed above, Plaintiff has alleged wrongful conduct. The allegations combined support the formation and operation of a conspiracy as well as wrongful conduct on the part of some of the defendants such that Defendants may be liable. While the Court believes this cause of action is superfluous as it does not add any additional liability, but merely identifies the activation of liability for other torts alleged in the FAC, the Court declines to overrule the demurrer as to conspiracy.

In sum, the Court overrules the demurrer in its entirety. Defendants' request for judicial notice is granted.

The Court notes that Defendants filed a motion to strike. (ROA # 69 and 71.) It appears that Defendants did not reserve a hearing date for their motion. Defendants' motion is not before the Court and will not be considered. (See Local Rule 2.1.19) Calendar No.: Event ID:  TENTATIVE RULINGS

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