Judge: Sandy N. Leal, Case: 2022-01296703, Date: 2023-08-31 Tentative Ruling
Demurrer to Complaint
Defendant MBK Homes Southern California, Ltd. (“Defendant”) demurs to Plaintiffs Waymon B. Tatum and Johnie M. Tatum’s (“Plaintiffs”) Complaint which alleges causes of action for fraud/intentional deceit and constructive fraud.
Whether the Causes of Action Are Barred by the Three-Year Statute of Limitations?
Defendant contends that Plaintiffs’ claims are barred by the three-year statute of limitations applicable to fraud claims because they signed the purchase agreement in 2008 and were provided with copies of everything they signed including the settlement statement which states the final purchase price was $753,584. Defendant further contends that Plaintiffs’ contention that the limitations period began to accrue on December 12, 2019 when they received an email from Defendant’s representative lacks merit as they cannot rely on Defendant’s most recent response to their ongoing inquiry to trigger the statute of limitations.
“A demurrer based on a statute of limitations will not lie where the action may be, but is not necessarily, barred…In order for the bar…to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows that the action may be barred.” (Committee for Green Foothills v. Santa Clara County Board of Supervisors (2010) 48 Cal.4th 32, 42.)
“An action for relief on the grounds of fraud or mistake must be commenced within three years. However, such action is not deemed accrued ‘until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.’ (Code Civ. Proc., § 338, subd. (d).) The courts interpret discovery in this context to mean not when the plaintiff became aware of the specific wrong alleged, but when the plaintiff suspected or should have suspected that an injury was caused by wrongdoing. The statute of limitations begins to run when the plaintiff has information which would put a reasonable person on inquiry. A plaintiff need not be aware of the specific facts necessary to establish a claim since they can be developed in pretrial discovery. Wrong and wrongdoing in this context are understood in their lay and not legal senses.” (Kline v. Turner (2001) 87 Cal.App.4th 1369, 1373–74.)
Here, the Complaint alleges that Plaintiffs entered into a contract to purchase the property for $720,490.00; that during the negotiations it was agreed Plaintiffs would receive a $200,000 credit on the purchase price based on the $720,490.00 purchase price; that the Final Settlement Statement dated 7/8/2009 states the final purchase price was $753,584.00 and is silent as to the $200,000 credit; and that it was only when a neighbor disclosed that she had paid significantly less for her home that Plaintiffs suspected discrepancies regarding their purchase price on their home. (See FAC, ¶¶ 6-11.)
The contract for Plaintiffs’ purchase of the home is dated January 31, 2008, and states the adjusted purchase price is $720,490; the Amendment to the Purchase Agreement is dated January 14, 2008 by Plaintiffs; and the Final Settlement Statement states the “Contract sales price” is $”753,584.00.” (See FAC, Exhibits A-C.) All of the documents show the purchase price is $753,584.00 and if Plaintiffs believed they were to receive the $200,000 credit from the purchase price of $720,490 as alleged, Plaintiffs would have been on notice that they had not received the credit in 2008.
Despite this, Plaintiffs contend that they were unaware they did not receive the $200,000 credit until a neighbor disclosed that she had paid significantly less and contend that they were only aware they did not receive the credit when Defendant’s representative informed them specifically of this on December 12, 2019. (See FAC, Exh. D.) Exhibit D however only shows that Defendant’s representative provided a response to Plaintiffs’ inquiry on December 12, 2019, not when Plaintiffs first inquired as to the issue.
And, in any event, the FAC fails to allege why or how Plaintiffs were unable to discover the alleged fraud within the limitations period. “The discovery rule only delays accrual until the plaintiff has, or should have, inquiry notice of the cause of action. The discovery rule does not encourage dilatory tactics because plaintiffs are charged with presumptive knowledge of an injury if they have ‘information of circumstances to put [them] on inquiry’ or ‘if they have the opportunity to obtain knowledge from sources open to [their] investigation.’” (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807–08.)
“In order to rely on the discovery rule for delayed accrual of a cause of action, ‘a plaintiff whose complaint shows on its face that his claim would be barred without the benefit of the discovery rule must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence.’” (Fox, supra, 35 Cal.4th at 808.)
Accordingly, the Court SUSTAINS the demurrer, with 20-days leave
to amend, as to the entire FAC based on the statute of limitations.
Special Demurrer for Uncertainty.
A demurrer for uncertainty is not intended to reach the failure to incorporate sufficient facts in the pleading but is directed at the uncertainty existing in the allegations actually made. (People v. Lim (1941) 18 Cal.2d 872, 883.) 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.) Errors and confusion created by “the inept pleader” are to be forgiven if the pleading contains sufficient facts entitling plaintiff to relief. (Saunders v. Cariss (1990) 224 Cal.App.3d 905, 908.) A demurrer for uncertainty should be overruled if the facts are presumptively within defendant’s knowledge. (Khoury v. Maly's of California, Inc., supra, 14 Cal.App.4th at p. 616.) A party attacking a pleading on “uncertainty” grounds must specify how and why the pleading is uncertain, and where that uncertainty can be found in the challenged pleading. (Fenton v. Groveland Community Services Dept. (1982) 135 Cal.App.3d 797, 809, disapproved on other grounds in Katzberg v. Regents of the University of California (2002) 29 Cal.4th 300.)
Defendants contend the FAC is uncertain, ambiguous, and/or unintelligible because it fails to allege who, when, or where they alleged misrepresentations or concealments were made; fails to allege who made the promises or what authority they paid or what the exact promise was; fails to identify who the “neighbor” is that said she paid less for her home; and fails to show how the Plaintiffs were unaware of what they paid for their home despite having the signed agreements which specifically state the purchase price.
The Complaint is not so unintelligible that Defendants cannot reasonably respond. Any ambiguities can be clarified through discovery. (Lickiss v. Financial Industry Regulatory Authority (2012) 208 Cal.App.4th 1125, 1135; Khoury v. Maly's of California, Inc., supra, 14 Cal.App.4th at p. 616.) Accordingly, the special demurrer for uncertainty is OVERRULED.
Whether the Causes of Action Are Sufficiently Pled?
Defendants contend the intentional misrepresentation and concealment claims are not sufficiently pled because Plaintiffs simply allege, they were told they would receive a $200,000 credit on top of the credit they were already given from the asking price, but fail to identify how, when, where, to whom, and by what means this promise was made or why it was not included in the fully executed contract.
The “elements of a cause of action for fraud are: (1) a misrepresentation, which includes a concealment or nondisclosure; (2) knowledge of the falsity of the misrepresentation i.e., scienter; (3) intent to reduce reliance on the misrepresentation; (4) justifiable reliance; and (5) resulting damages.” (Cadlo v. Ownes-Illinois, Inc. (2005) 125 Cal.App.4th 513.) Facts supporting each element must be pleaded with particularity sufficient to show how, when, where, to whom, and by what means the representations were tendered. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) General and conclusory allegations are not sufficient. (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 74.) Every element of fraud must be alleged both factually and specifically. (Hall v. Department of Adoptions (1975) 47 Cal.App.3d 898, 904.)
“The requirement of specificity in a fraud action against a corporation requires the plaintiff to allege the names of the persons who made the allegedly fraudulent representation, 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 157.)
“The elements of a claim for fraudulent concealment require the plaintiff to show that: ‘(1) the defendant ... concealed or suppressed a material fact, (2) the defendant [was] under a duty to disclose the fact to the plaintiff, (3) the defendant ... intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff [was] 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.’” (Prakashpalan v. Engstrom, Lipscomb & Lack (2014) 223 Cal. App. 4th 1105, 1130.)
“The duty to disclose may be established where there is a confidential relationship between the parties, defendant has made a representation which was likely to mislead due to the nondisclosure, there is active concealment of undisclosed matters, or one party has sole knowledge of or access to material facts and knows such facts are not known to or discoverable by the other party.” (Id.)
Here, the FAC fails to allege who on behalf of Defendant made the representations that Plaintiffs would receive the $200,000 credit from the purchase price of $720,490.00, fails to allege how the representations were paid, where the representations were made, and by what means the representations were made. The FAC also fails to allege why or how Defendant was under a duty to disclose any facts to Plaintiffs. Accordingly, the Court SUSTAINS, with 20-days leave to amend, the demurrer as to the entire FAC on these grounds as well.
Moving Party is to give notice.