Judge: Stephen P. Pfahler, Case: 22CHCV00178, Date: 2022-08-02 Tentative Ruling
Case Number: 22CHCV00178 Hearing Date: August 2, 2022 Dept: F49
Dept.
F-49
Date:
8-2-22
Case
#22CHCV00178
Trial
Date: Not Set
DEMURRER
MOVING
PARTY: Defendant, Quail Ranch Estates HOA, Inc.
RESPONDING PARTY: Plaintiff, Don Khalighi,
et al.
RELIEF
REQUESTED
Demurrer
to the Complaint
·
1st
Cause of Action: Breach of Contract
·
2nd
Cause of Action: Negligence
·
6th
Cause of Action: Declaratory Relief
SUMMARY
OF ACTION
Plaintiffs
Don and Armenouhi Khalighi are homeowners within a real estate development
governed by Quail Ranch Estates HOA, Inc. (HOA). Pursuant to “Articles and
Bylaws,” the HOA collected $150/month in assessments for the benefit of
participating homeowners. Plaintiffs alleges the individual defendant officers
comprising the HOA board violated “respective fiduciary duties,” due to their failure
to pay annual fees to the State of California, thereby leading to the
suspension of the HOA as a corporate entity; failed to hold required meetings;
failed to inform homeowner members regarding “various contracts” for common
area maintenance and landscaping; failed to provide adequate financial records
upon demand of Plaintiffs; and, authorized improper expenditures and
withdrawals without apparent board and/or homeowner approval.
On
March 17, 2022, Plaintiffs filed their complaint for Breach of Contract,
Negligence, Embezzlement, Fraud, Accounting and Declaratory Relief. On July 11, 2022,
Defendant Michael Morrell answered the complaint.
RULING: Sustained with
Leave to Amend.
Request for Judicial Notice:
Granted only to the filed documents, but not to the content of any of the
items.
Defendant Quail Ranch Estates HOA, Inc. brings the subject
demurrer to the breach of contract, negligence, and declaratory relief causes
of action.
A
demurrer is an objection to a pleading, the grounds for which are apparent from
either the face of the complaint or a matter of which the court may take
judicial notice. (Code Civ. Proc., § 430.30, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d 311,
318.) The purpose of a demurrer is to challenge the sufficiency of a pleading
“by raising questions of law.” (Postley
v. Harvey (1984) 153 Cal.App.3d 280, 286.) “In the construction of a
pleading, for the purpose of determining its effect, its allegations must be
liberally construed, with a view to substantial justice between the parties.”
(Code Civ. Proc., § 452.) The court “ ‘ “treat[s] the demurrer as admitting all
material facts properly pleaded, but not contentions, deductions or conclusions
of fact or law . . . .” ’ ” (Berkley v.
Dowds (2007) 152 Cal.App.4th 518, 525.) In applying these standards, the
court liberally construes the complaint to determine whether a cause of action
has been stated. (Picton v. Anderson Union High School Dist. (1996) 50 Cal.App.4th
726, 733.)
“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; Williams v.
Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139 [“[U]nder our liberal pleading rules, where the
complaint contains substantive factual allegations sufficiently apprising
defendant of the issues it is being asked to meet, a demurrer for uncertainty
should be overruled or plaintiff given leave to amend.]
1st Cause of Action, Breach of Contract:
Sustained with Leave to Amend.
Defendants submit the subject
demurrer on grounds that the complaint fails to sufficiently allege the actual
basis and terms of the contract. Even if Plaintiffs present the terms of any
contract, Plaintiffs cannot sue for breach of CC&Rs, but must seek an
enforcement action. Plaintiffs in opposition contend breach of contract is
stated due to the HOA’s failure to pay corporate taxes, which constitutes a
violation of CC&Rs that Plaintiffs incorporated into the complaint by
“reference.” Defendant in reply reiterates the deficiencies in the breach of
contract claim. Defendant additionally cites to the terms of the CC&Rs,
which are not actually part of the operative complaint, and therefore not
considered.
“To state a cause of action for
breach of contract, [a plaintiff] must plead the
contract, his performance of the contract or excuse for nonperformance, [defendant’s]
breach and the resulting damage. (Citation.) Further, the complaint must
indicate on its face whether the contract is written, oral, or implied by
conduct. (Citation.)” (Otworth v.
Southern Pac. Transportation Co. (1985) 166 Cal.App.3d 452, 458–59.) In
examining a breach of contract claim, the court is required to examine the
terms, or at least the legal effect of the contract. (Blank v. Kirwan, supra,
39 Cal.3d at p. 318 [“we give the complaint a reasonable interpretation,
reading it as a whole and its parts in their context”]; Otworth v. Southern Pac. Transportation Co.,
supra, 166 Cal.App.3d at p. 459 [“If
the action is based on an 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
instrument must be attached and incorporated by reference”]; Construction Protective Services, Inc. v.
TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 198–199 [“In an action
based on a written contract, a plaintiff may plead the legal effect of the
contract rather than its precise language”].)
The complaint lacks any actual terms or incorporated copy of
the CC&Rs. “Reference” to the existence of CC&Rs insufficiently meets
the standard for pleading contractual terms. The court therefore sustains the
demurrer to the complaint on this basis. The court finds insufficient support
for the argument that a homeowner within a governing homeowner association
remains barred from filing a breach of contract cause of action. (Pinnacle Museum Tower Assn. v.
Pinnacle Market Development (US), LLC (2012)
55 Cal.4th 223.)
2nd Cause of Action, Negligence Sustained with
Leave to Amend
Defendant challenges the subject cause of action on grounds
that the claim constitutes a “re-purposed breach of contract claim[].”
Defendant additionally alleges no independent basis of duty beyond the
CC&Rs. Plaintiff in opposition contends the complaint alleges a general
duty to all homeowners. Defendant in reply reiterates the lack of any basis of
negligence liability.
“The elements of any negligence cause of
action are duty, breach of duty, proximate cause, and damages. (Peredia v. HR Mobile Services, Inc. (2018) 25 Cal.App.5th 680, 687.) “‘It has been well established in this state that if
the cause of action arises from a breach of a promise set forth in the
contract, the action is ex contractu but if it arises from a
breach of duty growing out of the contract it is ex delicto.
[Citations.]’” (Wentland v.
Wass (2005) 126 Cal.App.4th 1484, 1495; Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d
167, 175.) “[C]onduct amounting to a breach of
contract becomes tortious only when it also violates a duty independent of the
contract arising from principles of tort law.” (Erlich v. Menezes (1999) 21 Cal.4th 543, 551.)
Given the lack of a
valid contract cause of action, the court considers the subject claim under a
required finding of an independent duty of care. Plaintiff alleges a general duty by
the HOA, but without sufficient underpinning support. The demurrer is therefore
sustained with leave to amend.
6th Cause of Action,
Declaratory Relief: Sustained with Leave to Amend
Defendant next challenges the claim for declaratory relief,
due to the lack of a valid contract. Plaintiffs in opposition cite back to the
general CC&R allegations in support of the instant cause of action.
Defendant in reply challenges the lack of any articulated relief.
Declaratory
relief arises under Code of Civil Procedure section 1060, which states in part:
“Any person
interested under a written instrument … or under a contract, or who desires a
declaration of his or her rights or duties with respect to another, or in
respect to, in, over or upon property … may, in cases of actual controversy
relating to the legal rights and duties of the respective parties, bring an
original action or cross-complaint in the superior court for a declaration
of his or her rights and duties in the premises, including a determination of
any question of construction or validity arising under the instrument or
contract. He or she may ask for a declaration of rights or duties, either alone
or with other relief; and the court may make a binding declaration of these
rights or duties, whether or not further relief is or could be claimed at the
time. The declaration may be either affirmative or negative in form and effect,
and the declaration shall have the force of a final judgment. The declaration
may be had before there has been any breach of the obligation in respect to
which said declaration is sought.”
“[U]nder California
rules, an actual controversy that is currently active is required for such
relief to be issued, and both standing and ripeness are appropriate criteria in
that determination. (Citation.) One cannot analyze requested declaratory relief
without evaluating the nature of the rights and duties that plaintiff is
asserting, which must follow some recognized or cognizable legal theories, that
are related to subjects and requests for relief that are properly before the
court.”
(Otay Land Co.v. Royal
Indemn. Co. (2008) 169 Cal.App.4th 556, 563.)
As addressed
above, the court finds the relied upon CC&Rs insufficiently articulated.
The court therefore finds the claim seeking an interpretation of rights
regarding said agreement wanting. The demurrer is therefore sustained with
leave to amend.
Conditions
Precedent
Finally,
Defendant contends Plaintiff failed to comply with pre-filing requirements regarding
efforts to engage in alternative dispute resolution. Plaintiff in opposition contends
efforts were made to engage the HOA, but plaintiffs were rebuffed. Defendant in
reply asserts the arguments in opposition are “nonresponsive.”
The court
cannot consider the argument to the extent it relies on extrinsic evidence and
inference. The court can however consider the lack of any allegations regarding
compliance with the requirement. The court therefore sustains the demurrer as
to the causes of action named against the HOA only.
In summary, the demurrer is
sustained with 30 days leave to amend. Plaintiff may not add new or different
causes of action beyond the scope of the existing claims though the court
grants Plaintiff leave to address the disparate fraud claims, if necessary. (Harris v. Wachovia Mortgage, FSB (2010) 185
Cal.App.4th 1018, 1023.)
Demurrers of Tammy and Patrick
Brooker, in pro per, set for August 24 and 31, 2022, respectively. If Plaintiff
files an amended complaint prior to one or both hearing dates, the demurrer(s)
will go off-calendar. The court will otherwise consider the remaining
challenged causes of action, where applicable.
Defendant
to give notice.