Judge Ronald F. Frank, Case 22TRCV00585 2022-12-07 Tentative Ruling

Judge: Ronald F. Frank, Case: 22TRCV00585, Date: 2022-12-07 Tentative Ruling

Case Number: 22TRCV00585 Hearing Date: December 7, 2022 Dept: 8

Tentative Ruling¿

¿¿

HEARING DATE: December 7, 2022¿¿

¿¿

CASE NUMBER: 22TRCV00585

¿¿

CASE NAME: Kyle E. Rapone, v. Carmen H. Imaicela, et al

¿¿

MOVING PARTY: Defendants, Sarinana Inc., Karen Y. Castillo, and David Sarinana

¿¿

RESPONDING PARTY: Plaintiff, Kyle E. Rapone

¿¿

TRIAL DATE: None set¿

¿¿

MOTION:¿ (1) Motion to Strike

Tentative Rulings: (1) Defendant’s Motion to Strike is GRANTED

¿¿

I. BACKGROUND¿¿

¿¿

A. Factual¿¿

On July 15, 2022, Plaintiff, Kyle E. Rapone (“Plaintiff”) filed this case against Defendants, Carmen H. Imaicela, Carmen Imaicela as Trustee of the Carmen H. Imaicela Living Trust, Karen Y. Castillo, David Sarinana, Sarinana, Inc., Trevor Schneeberger, Douglas Elliman of California, Inc., and DOES 1 through 25 alleging causes of action for: (1) Non-Disclosure of Material Facts; (2) Fraud- Intentional Misrepresentation; (3) Negligent Misrepresentation; (4) Concealment; and (5) Negligence. On October 10, 2022, Plaintiff filed the first amended complaint (“FAC”).

This case involves the sale of the real property known as 1001 S. Truro Avenue, Inglewood, California 90310 (“Property”.) Plaintiff is the buyer of the Property and Sarinana, Inc., Karen Y. Castillo and David Sarinana are seller Carmen H. Imaicela’s real estate broker and agent. Plaintiff alleged that since the purchase of the Property, Plaintiff has become aware of misrepresentations made to him by Defendants during the marketing and sale process of the Property.

Plaintiff alleges that prior to the sale, the Property included a full garage structure compliant with all permitting requirements of the City of Inglewood. However, Plaintiff claims that prior to his purchasing of the Property, the garage was demolished without proper permits from the City of Inglewood. Plaintiff also claims that after his purchase, he discovered a history of permitting issues with the Property’s garage which was not disclosed to him prior to the purchase of the Property. Plaintiff claims that upon the closing of the Property, Plaintiff first discovered the unpermitted garage demolition issue from a citation sent by the City of Inglewood. Plaintiff claims that he must now remedy the violations by building a new garage.

Here, Defendants moves to strike the “benefit-of-the-bargain” damages from the prayer of the First Amended Complaint. Defendants argue that pursuant to California law benefit-of-the-bargain damages are only recoverable against an intentional tortfeasor who is a fiduciary, so such damages are only available against an intentional tortfeasor who is a fiduciary, so such damages are only available against Defendants, Trevor Schneeberger and Douglas Elliman of California.

B. Procedural¿¿

On October 18, 2022, Defendants Sarinana Inc., Karen Y. Castillo, and David Sarinana (“Defendants”) filed this motion to strike. On November 18, 2022, Plaintiff filed an opposition. On November 21, 2022, Defendants filed a reply brief.

¿II. MOVING PARTY’S GROUNDS FOR THE MOTION

¿¿Defendants filed this motion to strike the following from Plaintiff’s First Amended Complaint” (1) The reference to “For benefit-of-the-bargain damages,” in the Prayer, at p. 17, ¶ 2, line 25.

¿III. REQUEST FOR JUDICIAL NOTICE

Defendants have requested that this Court take Judicial Notice of the FAC filed on October 10, 2022. Pursuant to Evidence Code § 453, this Court GRANTS Defendants’ request and takes judicial notice of Plaintiff’s FAC.

IV. ANALYSIS¿

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.)¿

In their moving papers, Defendants rely on cases where the Supreme Court has ruled that against a non-fiduciary, a plaintiff can only recover his out-of-pocket expenses measured by Civil Code § 3343. Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226. 1240-1241; Brasier v. Sparks (1993) 17 Cal.App.4th 1756, 1759; Housley v. City of Poway (1993) 20 Cal.App.4th 801, 810. Defendants further claim that Sarinana is a non-fiduciary and thus, Plaintiff can only recover his out-of-pocket expenses and not his benefit-of-the-bargain damages. Defendants assert that the FAC refers to Karen Castillo and David Sarinana as non-fiduciaries noting that Paragraph 4 of the FAC notes that “Karen Y. Castillo, an individual, (“Castillo”) is a resident of the County of Los Angeles, State of California and the seller's real estate agent of the real property commonly known as 1001 S. Truro Ave, Inglewood, California 90301, in the County of Los Angeles, City of Inglewood, APN No. 14 4023-037-017 (FAC, ¶ 4.) Further the FAC acknowledges that: “David Sarinana, an individual (“David”), is a resident of the County of Los Angeles, State of California and the seller’s real estate broker of the real property commonly known as 1001 S. Truro Ave, Inglewood, California 90301, in the County of Los Angeles, City of Inglewood, APN No. 4023-037-017.” (FAC, ¶ 5.)

In opposition, Plaintiff concedes that he was not in a fiduciary relationship with Defendants but argues that Defendants still owed him a diligent exercise of reasonable skill and care in performance of Defendants’ duties. Plaintiff argues that as the seller’s agent, he or she does not generally owe a fiduciary duty to the buyer, nonetheless, he or she “owes the buyer the affirmative duties of care, honesty, good faith, fair dealing, and disclosure as reflected in Civil Code § 2079.116, as well as other nonfiduciary duties otherwise imposed by law.” (Holmes v. Summer (2010) 188 Cal.App.4th 1510, 1528.) Plaintiff also contends that the seller’s agent has a duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observations of the parties. (Cal. Civ. Code § 2079.16.) Plaintiff claims, if a “seller knows of facts materially affecting the value or desirability of the property which are known or accessible only to [her] and also knows that such fact is not known to, or within the reach of the diligent attention and observation of the buyer, the seller is under a duty to disclose them to the buyer.” (Holmes v. Summer (2010) 188 Cal.App.4th 1510, 1518, quoting Lingsch v. Savage (1963) 213 Cal.App.2d 729, 735-736.) And when the seller’s real estate agent or broker is also aware of such facts, he or she is under the same duty to disclose those facts. (Lingsch v. Savage, supra, 213 Cal.App.2d at p. 736.)

Plaintiff’s FAC alleges that he is under the belief that Defendants were at all relevant times aware that the garage was demolished and unpermitted. (FAC ¶ 16.) Plaintiff’s FAC further alleges that the seller made no mention of the unpermitted demolition of the garage either, despite the “Real Estate Transfer Disclosure Statement” clearly requiring any disclosure of any structural modifications. (FAC ¶ 17.) Plaintiff alleges that Defendants were aware they were required to provide the “Application for Report of Building Records and Code Violations (Presale)” and the responsive report(s) from the City of Inglewood to Plaintiff. (FAC ¶ 19.) The FAC asserts that although the City of Inglewood emailed Defendant Karen Y. Castillo a copy of its report of building records and code violations, Defendants decided to conceal the reports from Plaintiff. (FAC ¶¶ 19-20.) Further, the FAC contends that when receiving the report from the City of Inglewood, Defendant Karen Y. Castillo signed the report acknowledging that the report must be signed by the prospective buyer and returned to the City. (FAC ¶ 26.)

“The ‘out-of-pocket’ measure of damages ‘is directed to restoring the plaintiff to the financial position enjoyed by him prior to the fraudulent transaction, and thus awards the difference in actual value at the time of the transaction between what the plaintiff gave and what he received. The ‘benefit-of-the-bargain’ measure, on the other hand, is concerned with satisfying the expectancy interest of the defrauded plaintiff by putting him in the position he would have enjoyed if the false representation relied upon had been true; it awards the difference in value between what the plaintiff actually received and what he was fraudulently led to believe he would receive.’ ” (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1240.) More recently, the First District in Moore v. Teed (2020) 48 Cal.App.5th 280, 287 approved the propriety of both measures of damages being pursued by fraud plaintiffs. The Second District determined that the “preferable view is that damages for fraud by a fiduciary should not be limited to out-of-pocket losses.” (Fragale v. Faulkner (2003) 110 Cal.App.4th 229, 238.)

Plaintiff claims that there is a split in authority of the appellate courts with respect to the measure of damages for intentional fraud by a fiduciary. Moore vs Teed recently reiterated the existence of a split between the appellate districts. However, as noted in Defendant’s reply brief, the split of authority is not on what damages once can recover against a non-fiduciary, but instead, whether a plaintiff can get benefit of the bargain damages against a fiduciary buyer’s agent if the buyer’s agent commits fraud. Here, “[i]n the absence of a fiduciary relationship, recover in a tort action for fraud is limited to the actual damages suffered by the plaintiff.” (Salahutdin v. Valley of California, Inc., 24 Cal.App.4th 555, 5.) As noted by Defendant and Plaintiff, no fiduciary duty existed between the Plaintiff and the seller’s agents. As such, the Plaintiff cannot recover benefit-of-the bargain damages from Defendants Sarinana Inc., Karen Y. Castillo, and David Sarinana.

¿¿

V. CONCLUSION¿¿

¿¿¿

For the foregoing reasons, Defendants’ Motion to Strike is GRANTED.

¿¿¿

Moving party is ordered to give notice.¿¿¿¿

¿¿¿

¿¿