Judge: Shirley K. Watkins, Case: 23VECV01956, Date: 2023-04-24 Tentative Ruling
Case Number: 23VECV01956 Hearing Date: April 24, 2023 Dept: T
22VECV01956 DAVID WHITE vs SIRAJ A. FAHOUM, et al.
[TENTATIVE] ORDER: Defendants Siraj Fahoum and Pilar Fahoum’s Demurrer to the First Amended Complaint is OVERRULED.
Defendants Siraj Fahoum and Pilar Fahoum’s Motion to Strike Portions of the First Amended Complaint is DENIED.
Defendants Siraj Fahoum and Pilar Fahoum are ordered to file an ANSWER, 20 days from notice of this ruling.
Defendants Siraj Fahoum (Fahoum) and Pilar Fahoum (Pilar) (collectively, Defendants) demurred to Plaintiff David White’s (Plaintiff) First Amended Complaint (FAC.) Defendants’ demurrer placed into issue all six causes of action (COA) alleged in the FAC. Defendants’ moved to strike portions of the FAC. Defendants’ motion placed into issue certain allegations and the request for punitive damages.
The Reply was due April 17, 2023. It was filed without an explanation as to the late filing on 4/19/2023. The Reply is not considered.
Discussion
Defendants argued that the first COA for breach of written contract failed to attach the agreement, plead the terms in haec verba, or plead the legal effect of the agreement. However, a plain reading of the allegations showed that Plaintiff and Defendants entered a “standard CAR form Vacant Land Listing Agreement wherein Plaintiff agreed to list/sell the property and Defendants agreed to pay Plaintiff a 5% commission of the list or contract price. The parties entered the agreement in October 2013. The term for the Vacant Land Listing Agreement ended on March 13, 2014. (FAC pars. 9-10.) The parties then entered a “Listing Change Authorization” in June 2014 that extended the expiration date to June 30, 2017, changed the sale price to $3.9 million, and changed the commission fate to 3%. (FAC par. 21) (Vacant Land Listing Agreement and Listing Change Authorization, collectively referred to as, Listing Agreement.) The parties then canceled the Listing Agreement by executing a Cancellation of Listing and entered a Commission Agreement. The Commission Agreement provided that Defendants would pay 3% commission on the $3,848,000.00 sale price of the property. Plaintiff alleged that the Commission Agreement was not exclusive and promise to pay for services rendered. (FAC pars. 29-32.) It is noted that the first COA is expressly grounded upon a breach of the Commission Agreement. (FAC pars. 45-48.) Because the factual allegations included facts showing the obligations of the parties under the Commission Agreement, Plaintiff sufficiently pled the legal effect of the Commission Agreement.
Defendants then argued that the term “left” in FAC paragraph 38 is uncertain. (FAC pg. 8:1.) Defendants argue that the uncertainty is that there are no facts to show a meeting of the minds. However, the term “left” when read in the entire sentence is certain and clear. The term is read in conjunction with “blank” to allege that an entry in the contract provision was not filled in. To the extent that Defendants argued that the entire paragraph shows a lack of agreement, the allegation in paragraph 38 is seen to only explain why a contract provision was not filled in. The “meeting of the minds” is sufficient alleged in the paragraphs reviewed above regarding the alleged obligations of the parties.
Defendants argued that the contract-based claims (i.e., first through fourth COAs) are barred by the four statute of limitations (SOL) for breach of written contract (Code Civ. Proc. sec. 337(a)) and barred by the express terms of the Listing Agreement/Cancellation of the Listing Agreement. The argument is based upon a narrow reading of the allegations of the FAC. Defendants’ argument solely looked to the allegations surrounding the Listing Agreement and the Cancellation of the Listing Agreement. However, the Commission Agreement is alleged to be the operative contract between the parties. Even if the SOL argument were applied to the Commission Agreement, Plaintiff alleged that the Commission Agreement was entered in April 2019 and included the obligation to Plaintiff commission from the sale of the property. (FAC par. 29-31.) Defendants’ obligation to pay the commission arose when the sale of the property was completed. However, Defendants allegedly represented in June 2019 that the transaction “was off.” Plaintiff alleged that it was not until May 2021 that Plaintiff discovered that the representation was false. (FAC pars. 39-40.) Based upon this fraud, the purported SOL did not accrue until May 2021 – discovery of the breach. This action being filed in November 2022 makes the action timely filed under the facts as pleaded. Because these two arguments do not consider all the factual allegations, the arguments are not persuasive.
Defendants argued that the 2019 Commission Agreement is based upon Plaintiff’s obligation to perform and actual performance in the past. However and again, Defendants’ argument is a narrow reading of the allegations. The FAC also alleged that part of the Commission Agreement was a reaffirmation of Defendants’ obligation to pay for past services. (FAC par. 31.) However, sufficient consideration applies to executory contracts. Attacking an executed contract for lack of consideration is without merit. Plaintiff alleged facts to show that he performed his obligations. Because of Plaintiff’s past performance, the contract is no longer executory.
Defendants’ demurrer to the first COA, as well as the contract-based claims, are OVERRULED.
Defendants argued that the second COA for breach of the covenant of good faith and fair dealing is in violation of Business and Professions Code secs. 10176 and 10176(f). The statute requires that the agreement contain a “definite, specified date of final and complete termination.” However, the statute is not yet seen to be applicable to the Listing Agreement or the subsequent Commission Agreement. The statute expressly applies to “exclusive” listing or commission agreements. (Id.) Nowhere in the FAC does Plaintiff allege that the Listing Agreement or the Commission Agreement are “exclusive.” Plaintiff even goes to expressly plead that the Commission Agreement is “not an exclusive agreement.” (FAC par. 32.) For Demurrer purposes, the factual allegations of the FAC are deemed true. Because there are no facts to show that the agreement at issue is “exclusive,” the statute is inapplicable.
Defendants’ demurrer to the second COA is OVERRULED.
Defendants argued that third COA for Common Count Quantum Meruit and fourth COA for Common Count Money Had and Received are barred by the Cancellations of the Listing Agreement and the SOL. As reviewed above, these two arguments are not persuasive.
Defendants’ demurrer to the third and fourth COAs is OVERRULED.
Defendants argued that the fifth COA for declaratory relief is subject to the statute of frauds. However, the argument is conclusory and fails to address the express allegation that the Commission Agreement is written. For demurrer purposes, the allegation of a writing is deemed true and the Statute of Frauds argument is improper for the demurrer stage.
Defendants’ demurrer to the fifth COA is OVERRULED.
Defendants’ argued that the fourth COA for fraud is time-barred (Code Civ. Proc. sec. 347(a)) and that the Cancellation of the Listing Agreement cancelled all previous obligations. Defendants SOL argument is grounded on the allegation that the fraud occurred in 2013-2014, when the Listing Agreement was entered. This is a narrow reading of the facts alleged in the FAC. The FAC’s fraud claim is further based upon the 2019 Commission Agreement’s promise to pay and the April 2019 misrepresentation as to the transaction being “off.” Because the SOL argument does not address all the alleged misrepresentations, there is insufficient showing that the claim is necessarily time-barred through clear and affirmative allegation in the FAC. The SOL argument is unpersuasive. Defendants’ argument relying upon the Cancellation of the Listing Agreement is unpersuasive because it failed to address the allegation that Defendants reaffirmed the obligation to pay in the Commission Agreement. Defendants’ argument is against a narrow reading of the facts alleged and unpersuasive.
The demurrer to the sixth COA is OVERRULED.
Defendants argued the special demurrer of uncertainty. However, the FAC, read as a whole, is clear and certain. The factual allegations are sufficiently pled to place Defendants on notice of the claims alleged against them. The arguments asserted in this section of the demurrer are the same arguments addressed above (i.e., Bus. & Prof. Code sec. 10176(f); failure to attach the written agreement; failure to fill-in an end date; SOL; reliance upon the Cancellation of the Listing Agreement; past consideration) and are not reviewed again. If any uncertainty lies within the FAC, the Court finds that such uncertainties can be resolved during discovery.
Defendants’ special demurrer to all COAs is OVERRULED.
Defendants moved to strike portions of the FAC because certain allegations are irrelevant, false, or improper. The Court did not find the specified allegations to be irrelevant, false, or improper. Plaintiff’s allegations as to the circumstances around Plaintiff’s performance of the agreement, entry into the agreement, breaches, and misrepresentations by Defendants; how the parties transacted; and the terms of the agreement are relevant and provide factual allegation to support elements of the COAs. The Court noted that some of the arguments are the same as the arguments addressed in the concurrent demurrer (i.e., Commission Agreement lacking an end date; the word “left” being uncertain; SOL; barred by the Cancellation of the Listing Agreement; barred the terms of the agreement; and past obligations.) Because some of the arguments are the same as those made in the demurrer, the Court references the analysis above and did not review the arguments again.
As to punitive damages, Defendants argued that punitive damages are not recoverable for breach of contract. This argument misconstrued the allegation for punitives. As cited by Defendants’ own motion, the claim for punitive damages is found in FAC par. 81 and the Prayer. The allegation is made within the fraud COA. There are no claims for punitive damages in the other contract based COAs. Because Defendants’ motion to strike punitive damages misconstrued the allegations, the motion as to punitive damages is unpersuasive.
The Motion to Strike is DENIED as to all requests.
IT IS SO ORDERED, CLERK TO GIVE NOTICE.