Judge Ronald F. Frank, Case 21TRCV00483 2023-02-09 Tentative Ruling

Judge: Ronald F. Frank, Case: 21TRCV00483, Date: 2023-02-09 Tentative Ruling

Case Number: 21TRCV00483 Hearing Date: February 9, 2023 Dept: 8

Tentative Ruling¿

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HEARING DATE: February 9, 2023¿¿

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CASE NUMBER: 21TRCV00483

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CASE NAME: Omster Haynes III, et al. v. Ant Re and Acquisitions Partners, LLC, et al

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MOVING PARTY: Defendant, Ant Re and Acquisitions Partners, LLC

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RESPONDING PARTY: Plaintiff, Omster Haynes III and Karla Haynes

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TRIAL DATE: None set¿

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MOTION:¿ (1) Demurrer¿ to the Second Amended Complaint’s sole cause of action for breach of contract

(2) Request for Monetary Sanctions

(3) CMC to be conducted

Tentative Rulings: (1) Overruled. Defendant shall Answer within 20 days

(2) Sanctions request is denied.

(3) The Court will set a trial and FSC dates in early 2024. Counsel should have their calendars ready during the CMC

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I. BACKGROUND¿¿

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A. Factual¿¿

On July 6, 2021, Plaintiffs filed their Complaint. On February 22, 2022, Plaintiffs filed the First Amended Complaint. On November 8, 2022, Plaintiffs filed a Second Amended Complaint (“SAC”) alleging breach of contract. The SAC alleges that Plaintiffs purchased the real property located at 4508 W. 142 Street Hawthorne, CA 90250. Plaintiffs claim that Defendant failed to disclose the property’s deficiencies with safety code violations and citations.

Defendants now demur to the SAC. When this matter was assigned tot eh Torrance courthouse, demurrers were sustained to different causes of action resulting in a first and now second amended complaint. The Court notes that the fraud and B&P Code § 17200 claims asserted in the first amended complaint were not repeated or realleged in the SAC.

B. Procedural¿¿

On November 30, 2022, Defendants filed a demurrer. On January 27, 2023, Plaintiffs filed an opposition. On February 2, 2023, Defendants filed a reply brief.

¿II. MOVING PARTY’S GROUNDS FOR THE DEMURRER¿& MOTION TO STRIKE¿

Defendants demur to the first cause of action for Breach of Contract on the grounds that Defendants assert the SAC fails to state sufficient facts because it fails to allege the specific term of the contract that was actually breached. Additionally, Defendants argue that Plaintiffs fails to allege the legal effect of the term that was purportedly breached.

III. MEET AND CONFER

Plaintiffs argue that Defendants failed to Meet and Confer regarding this third filed demurrer. Counsel for Defendants asserts that on November 23, 2022, he attempted to meet and confer by telephone with counsel for Plaintiffs by issuing written email correspondence to Plaintiffs’ counsel explaining Defendants’ position in detail. (Declaration of Jordan Matthews (“Matthews Decl.”), ¶ 3.) Defendants’ counsel states that he did not receive a response to his correspondence, but the Opposition attaches a December 1, 2022 email from plaintiff’s counsel to defense counsel. The Opposition notes that November 23 was the day before Thanksgiving, that the truncated SAC was served on October 26, and that despite two prior demurrers the claimed deficiencies with the sole remaining breach of contract cause of action was never asserted before. Accordingly, there was a minimalist effort to meet and confer before the Demurrer was filed. Hopefully if there are future motions filed in this case, a less eleventh-hour and more interactive meet-and-confer process will be presented.

IV. ANALYSIS¿¿

As a preliminary matter, Plaintiffs assert in their opposition that Defendants demurrer is untimely filed. Plaintiff asserts that Defendant did not file its motion within the proper 30-day timeframe provided by Code. Plaintiff also notes that this matter has been pending since July 2021, after two amended complaints and this third demurrer is the first time a failure to state a cause of action based on breach of contract has come up. Defendant’s reply cites to McAllister v. County of Monterey (2007) 147 Cal.App.4th 253, 280 to support its assertion that the Demurrer was not untimely even though it was field more than 30 days after service of the SAC. McAllister notes that the 30-day time to demur is not mandatory by virtue of the Legislature’s use of the permissive verb “may.” Accordingly, the Court will consider the Demurrer on the merits even though it was filed later than most defense counsel would have filed it. As to the plaintiff’s argument that the two prior demurrers failed to attack the breach of contract cause of action but this third demurrer does, the Court concurs with Defendant that CCP §430.41(b) bars this third demurrer, but the Court also concurs with Plaintiff that the failure to have mentioned a claimed obvious pleading defect earlier can be considered by the Court in evaluating the persuasiveness of Defendant’s position.¿¿

A. Demurrer

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A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.) For the purpose of testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967.) A demurrer “does not admit contentions, deductions or conclusions of fact or law.” (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.)¿¿¿¿

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Breach of Contract

To state a cause of action for breach of contract, Plaintiff must be able to establish “(1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.)

If a breach of contract claim “is based on alleged breach of a written contract, the terms must be set out verbatim in the body of the complaint or a copy of the written agreement must be attached and incorporated by reference.” (Harris v. Rudin, Richman & Appel (1999) 74 Cal.App.4th 299, 307.) In some circumstances, a plaintiff may also “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.) Here, Plaintiff attaches a copy of the contract to the SAC.

Plaintiffs’ SAC alleges that on or about May 5, 2018, Plaintiffs and Defendants entered into written Residential Purchase Agreement and Escrow Instruction (“RPA”) under which Defendants allegedly agreed to sell and Plaintiffs agreed to buy the Subject Property. (SAC, ¶ 20.) Plaintiffs attached the RPA to their SAC as Exhibit A. Plaintiffs allege that according to the RPA, Defendants were required to make certain disclosures regarding the Subject Property. (SAC, ¶ 21.) Plaintiffs assert that they performed all precedent conditions and obligations required of them in the RPA and purchased the Subject Property on or about June 13, 2018. (SAC, ¶ 22.) However, Plaintiffs allege that Defendants breached the RPA by failing to disclose the Subject Property’s various deficiencies with the safety code violations and citations which materially affected the value of the Subject Property. (SAC, ¶ 23.) As such, Plaintiffs argue that Defendants have breached the contract and that Plaintiffs have suffered and continue to suffer substantial, economic, and noneconomic damages. (SAC, ¶ 24.)

Defendants’ demurrer argues that although Plaintiffs’ SAC alleges that Defendants failed to make certain disclosures, it failed to allege what terms of the contract were specifically breached. Defendants argue that this is problematic because the agreement specifically advises Plaintiffs of their right to investigate the property in connection with any sale. (SAC, Exhibit A, ¶ 12(B)). Defendants also assert that Plaintiffs have failed to sufficiently allege that Defendant had any actual knowledge of any purported deficiency related to the property. But the SAC does contain such allegations. Plaintiffs allege that Defendants received a City notice of violations on October 9, 2018 “that were not disclosed to Plaintiffs by Defendants.” (SAC, ¶ 10). The SAC alleges that Mr. and Mrs. Thompson on behalf of Seller signed “documentation” that addressed “many safety violations at that time.” (Id. ¶ 12.) That same paragraph concludes “Seller was well aware of the safety violations regarding the subject Property and failed to inform Plaintiffs.” The SAC later alleges that Plaintiffs were required by the City to remedy “violations and citations Defendants failed to disclose” (Id. ¶14.) Paragraph 15 alleges the safety code violations and citations were so extensive that “Defendants must have known or should have known these issues during escrow.”

In opposition, Plaintiffs assert that sellers of residential real property have a duty to disclose any facts materially affecting the value or desirability of the property that are known or accessible only to the seller and not known to or within the reach of the diligent attention and observation of the buyer. Plaintiffs point to RPA page 5, paragraph 11(A), noting “Seller shall…DISCLOSE KNOWN MATERIAL FACTS AND DEFECTS affecting the Property…and make any and all other disclosures required by law.” Plaintiffs’ SAC further pleads that “…Defendants were required to make certain disclosures regarding the Subject Property” and that “Defendants breached the RPA by failing to disclose the Subject Property’s various deficiencies with the safety code violations and citations which materially affected the value of the Subject property.” (SAC, ¶¶ 21, 23)

It is true that the minimalist pleading of the first cause action with its five single sentences of substantive allegations contains no details as to what facts were not disclosed or what contract provision was breached. But Paragraph 19 incorporates the substantive allegations contained earlier in the SAC, which the Court has quoted and referenced above.

This Court finds that Plaintiff’s SAC has stated sufficient facts to allege a cause of action for Breach of Contract. As such, the demurrer is overruled.

B. Sanctions

In their opposition, Plaintiffs requested this court for attorneys’ fees, claiming Defendant’s demurrer is untimely, frivolous, and a delay tactic. Counsel for Plaintiffs requested $1,800 for spending four (4) hours reviewing the Demurrer, drafting the opposition, reviewing the reply brief, and appearing at the hearing. While the Court understands the reasoning behind the sanctions request, the Court does not agree monetary sanctions are warranted on this record. However, the Court will be mindful of the circumstances should a similar situation arise on a future motion.

IV. CONCLUSION¿¿

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Based on the foregoing, Defendant’s Demurrer is OVERRULED. Answer shall be filed within 20 days.

Moving party to give notice. ¿¿¿