Judge: Ronald F. Frank, Case: 22TRCV00008, Date: 2023-08-29 Tentative Ruling
Case Number: 22TRCV00008 Hearing Date: November 21, 2023 Dept: 8
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HEARING DATE: August 29, 2023¿¿
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CASE NUMBER: 22TRCV00008
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CASE NAME: HMCN Properties, LLC v. JBJ Business Center, LLC,
et al.
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MOVING PARTY: Defendants, JBJ Business Center, LLC, South Bay Property
Management & Sales, Inc., and Tim Kelley
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RESPONDING PARTY: Plaintiff, HMCN Properties, LLC
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TRIAL DATE: None
set.¿
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MOTION:¿ (1) Demurrer¿to fraud claim in Third Amended Complaint
(2)
Motion to Strike
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Tentative Rulings: (1) Defendants’ Demurrer is SUSTAINED
if Plaintiff seeks to claim fraud as against Kelly and South Bay. The allegations are sufficient as to JBJ. Leave to amend yet again to be discussed
(2)
Motion to Strike is MOOTED
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A. Factual¿¿
On January 5, 2022, Plaintiff, HMCN
Properties, LLC filed a Complaint against Defendants, JBJ Business Center, LLC,
South Bay Property Management & Sales, Inc., Tim Kelley, and DOES 1 through
10. On November 16, 2022, Plaintiff filed a First Amended Complaint. On May 18,
2023, Plaintiff filed a Second Amended Complaint. On September 29, 2023,
Plaintiff filed a Third Amended Complaint (“TAC”) alleging causes of action
for: (1) Breach of Contract; (2) Fraud; and (3) Specific Performance.
Defendants now file a demurrer and
motion to strike portions of the TAC.
B. Procedural¿¿
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On October 18, 2023, Defendants filed
its Demurrer and Motion to Strike. On November 7, 2023, Plaintiff filed
opposition briefs. On November 14, 2023, Defendants filed reply briefs.
¿II. MOVING PARTY’S GROUNDS
FOR THE DEMURRER¿& MOTION TO STRIKE¿
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Defendants demur to the Second Cause of Action for
fraud on the grounds they argue Plaintiff does not state facts sufficient to
constitute a cause of action against Defendants, fraud is not plead with the
requisite specificity, and the cause of action is uncertain, vague, and
ambiguous as to the parties and acts which occurred.
Defendants filed a Motion to Strike the following from
Plaintiff’s TAC:
1.
Paragraph 3 of the Prayer for Relief, at
page 10, line 12, in its entirety, stating “For an award of punitive damages…”;
and
2.
Paragraph 7 of the Prayer for Relief, at
page 10, line 17, in its entirety, stating “For costs of suit and reasonable
attorney’s fees incurred herein pursuant to the Agreement.
III. ANALYSIS¿¿
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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A pleading is uncertain if
it is ambiguous or unintelligible. (Code Civ. Proc., § 430.10, subd. (f).) A
demurrer for uncertainty may lie if the failure to label the parties and claims
renders the complaint so confusing defendant cannot tell what he or she is
supposed to respond to.¿ (Williams v. Beechnut Nutrition Corp. (1986)
185 Cal.App.3d 135, 139, fn. 2.) However, “[a] demurrer for uncertainty is
strictly construed, even where a complaint is in some respects uncertain,
because ambiguities can be clarified under modern discovery procedures.” (Khoury
v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 616.)¿¿¿
Fraud
Defendants argue that Plaintiff’s cause of action for
fraud fails. “The elements of fraud are (a) a misrepresentation (false
representation, concealment, or nondisclosure); (b) scienter or knowledge of
its falsity; (c) intent to induce reliance; (d) justifiable reliance; and (e)
resulting damage.” (Hinesley v. Oakshade
Town Ctr. (2005) 135 Cal.App.4th 289, 294.) The facts constituting the
alleged fraud must be alleged factually and specifically as to every element of
fraud, as the policy of “liberal construction” of the pleadings will not
ordinarily be invoked. (Lazar v. Superior
Court (1996) 12 Cal.4th 631, 645.) To properly allege fraud against a
corporation, the plaintiffs must plead the names of the persons allegedly
making the false representations, their authority to speak, to whom they spoke,
what they said or wrote, and when it was said or written. (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153,
157.)
Defendants
argue that Plaintiff’s fraud cause of action is uncertain, ambiguous, and
unintelligible because Defendants are unaware of what specific allegation
support each of the causes of action in the TAC. For example, Defendants assert
that they are not sure which facts give rise to a claim against JBJ Business
Center, LLC, South Bay Property Management & Sales, Inc., and Tim Kelley,
individually. Defendants also argue that Plaintiff failed to allege any of the
elements of fraud with specificity required by law. The Court notes that the
TAC alleges that: “[e]ach of the defendants was the agent of the other
defendants in regard to all events and actions described herein and acted
within the course and scope of such agency at all relevant times” (TAC, ¶ 7),
this is not sufficient in the Court’s view to allege fraudulent concealment
against each of the Defendants, given the other allegations in the TAC and the
attached exhbitis which show JBJ as the seller and disclosing party, not the
other named defendants. In short, the Court
finds there is sufficient specificity to state a fraud cause of action against
JBJ, but not against South Bay and Kelly.
The Court recognizes that the TAC notes that the seller, JBJ Business
Center, LLC, was represented by both Defendants, Kelley and South Bay Property.
(TAC, ¶ 10.) The TAC alleges that the Agreement’s Property Information Sheet
contained sections where [“]Defendants[”] were required to, but did not,
disclose matters pertaining to ‘unrecorded title matters’, ‘Leases,’ and
‘options,’ which are exactly the material items that [“]Defendants[”] were
aware of, but chose not to disclose to Plaintiff.” (TAC, ¶ 12.)
The Court
believes that TAC is well pled, and full of specificity as to each of the
Defendants, especially in the general allegations section of the TAC. What is lacking is sufficient detail as to
what it is that Kelly did or failed to do, what Kelly knew or should have known,
and what South Bay did or failed to do its separate from Kelly. As such, if
Plaintiff intends to maintain fraud causes of action against Kelly and South
Bay, in addition to the claim against JBJ, the Demurrer to the second cause of
action is SUSTAINED. Plaintiff will be given the opportunity to address the
deficiencies in its pleading and inform the Court whether or not they will be
able to allege sufficient facts to maintain this cause of action against
Defendants.
B. Motion to Strike¿¿
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The court may, upon a motion, or at any time in its
discretion, and upon terms it deems proper, strike any irrelevant, false, or
improper matter inserted in any pleading.¿ (Code Civ. Proc., § 436(a).)¿ The
court may also strike all or any part of any pleading not drawn or filed in
conformity with the laws of this state, a court rule, or an order of the
court.¿ (Id., § 436(b).)¿ The grounds for a motion to strike are that
the pleading has irrelevant, false improper matter, or has not been drawn or
filed in conformity with laws.¿ (Id., § 436.)¿ The grounds for moving to
strike must appear on the face of the pleading or by way of judicial notice.¿ (Id.,
§ 437.)¿ “When the defect which justifies striking a complaint is capable of
cure, the court should allow leave to amend.”¿ (Vaccaro v. Kaiman (1998)
63 Cal.App.4th 761, 768.)¿ ¿
Here, the Motion to Strike seeks to strike paragraph 3
of the prayer of relief for an award of punitive damages, and paragraph 7 of
the prayer for costs of suit and reasonable attorney’s fees. Further, with
respect to fraud, the Court above has sustained the demurrer. As such, the
Motion to Strike is mooted since it relies on the same arguments presented in
its demurrer and to which the Court sustained.¿¿