Judge: Thomas S. Mcconville, Case: 2021-01198726, Date: 2023-08-15 Tentative Ruling
Demurrers to First Amended Complaint.
The demurrers by (1) defendant Jacquelin Sandoval and (2) defendants Max Sandoval, 6 Star Redevelopment, LLC [“6 Star”], and Maxximum Realty, Inc. [“Maxx”] to the First Amended Complaint [“FAC”] are SUSTAINED, with leave to amend, as to the 6th cause of action for breach of common law duty, and 7th cause of action for breach of statutory duty, on grounds of failure to state facts sufficient to constitute a cause of action. (Code Civ. Proc., § 430.10, subd. (e). The remainder of the demurrers are OVERRULED.
Plaintiff shall have 10 days to file an amended complaint.
Defendants Max Sandoval, 6 Star, and Maxx’s request for judicial notice is DENIED. (Evid. Code, § 453, subd. (a) [adequate notice required]; Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374 [“The hearing on demurrer may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of documents whose truthfulness or proper interpretation are disputable”].)
Plaintiff’s request for judicial notice is DENIED. (Cal. Rules of Court, Rule 3.1113, subd. (l) [separate document required]; Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 295 [court need not take judicial notice of irrelevant documents].) The court has not considered any exhibits attached to the Oppositions. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318 [demurrer limited to matters on face of pleadings, or documents properly subject to judicial notice].)
The parties’ sanctions requests are DENIED. The requests were not made in a separate motion as required; further, there is no evidence that the parties’ complied with the “safe harbor” provision. (Code Civ. Proc., § 128.5, subds. (f)(1)(A), (B).) Code Civ. Proc., § 128.6 has been repealed.
The court observes that plaintiff’s Oppositions exceed applicable page limits, without leave of court. (Cal. Rules of Court, Rule 3.1113, subd. (d).) While the Oppositions have been considered in their entirety, the parties are cautioned that future violations will not be overlooked.
Plaintiff shall give notice on both demurrers.
1st cause of action: breach of contract
This cause of action is sufficiently alleged. (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821 [elements]; FAC, ¶¶ 12, 14, 15 [oral loan agreement], 17, 18, 36 [plaintiff’s performance of money lent], 18, 19, 34 [breach by failing to record DOT and repay loan], 19, 38, 43 [proximately caused damages].)
As alleged, this cause of action is timely. (Romano v. Rockwell International, Inc. (1996) 14 Cal.4th 479, 488 [breach of contract claim accrues at time of breach]; FAC, ¶ 19 [alleging property was sold on 5-1-19, and defendants’ breach occurred thereafter when they failed to repay plaintiff; action filed 4-28-21.)
Further, the FAC (¶ 17) also alleges defendants executed a promissory note and deed of trust for $80,000, which would be subject to a four-year statute of limitations. (Code Civ. Proc., § 337, subd. (a).)
2nd cause of action: negligence
This cause of action is sufficiently alleged. (Ladd v. County of San Mateo (1996) 12 Cal.4th 913, 917 [elements]; FAC, ¶¶ 2, 12 [defendants allegedly acted as plaintiff’s broker, establishing duty], 18, 19, 34 [breach by failing to record DOT and repay loan], 19, 50 [proximately caused damages].) Defendants’ timeliness arguments fail for the reasons set forth above. Further, plaintiff’s claim is not based on an “agreement authorizing or employing an agent, broker, or any other person to purchase or sell real estate, or to lease real estate for a longer period than one year, or to procure, introduce, or find a purchaser or seller of real estate or a lessee or lessor of real estate where the lease is for a longer period than one year, for compensation or a commission,” as contended by MPs. (Civ. Code, § 1624, subd. (a)(4).) Second, the FAC does not allege there is no written broker agreement. (Blank v. Kirwan, supra at 318 [demurrer limited to matters on face of pleadings, or documents properly subject to judicial notice].)
3rd cause of action fraudulent concealment
The FAC sufficiently alleges fraudulent concealment as to defendants M. Sandoval, 6 Star, and Maxx. (Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634, 665-666 [elements]; Michel v. Moore & Associates, Inc. (2007) 156 Cal.App.4th 756, 762 [broker has fiduciary duty to client, including duty to disclose “all information it possesses that is material to the principal's interests”]; William L. Lyon & Associates, Inc. v. Superior Court (2012) 204 Cal.App.4th 1294, 1311 [“the fiduciary duty of real estate brokers to their clients does not arise under contract;” real estate brokers owe common law fiduciary duties to their clients requiring “the highest good faith and undivided service and loyalty”]; FAC, ¶¶ 25, 26, 56 [concealment of deed of trust recorded in favor of J. Sandoval and failure to record plaintiff’s deed of trust], ¶¶ 2, 12 [defendants acting as plaintiff’s broker, establishing duty], 24, 25, 60, and 62-64 [intent], 29, 61 [plaintiff unaware of true facts / reliance], 19, 72 [proximately caused damages].)
The FAC does not allege that there is no written broker agreement. (Blank v. Kirwan, supra at 318 [demurrer limited to matters on face of pleadings, or documents properly subject to judicial notice]. Further, a written agreement is not required to establish a fiduciary duty. (William L. Lyon & Associates, Inc. v. Superior Court, supra at 1311.)
The FAC sufficiently alleges aiding and abetting concealment as to defendant J. Sandoval. (Casey v. U.S. Bank Nat. Assn. (2005) 127 Cal.App.4th 1138, 1145 [elements]; Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38 [“If the complaint states a cause of action under any theory, regardless of the title under which the factual basis for relief is stated, that aspect of the complaint is good against a demurrer”]; FAC, ¶¶ 55, 60 [knowledge of fraud and breach of fiduciary duty], 54, 55, 58, 69 [substantial assistance and/or encouragement], 19, 72 proximately caused damages].)
4th cause of action: intentional misrepresentation; 5th cause of action negligent misrepresentation
The FAC sufficiently alleges both intentional and negligent misrepresentation as to defendants M. Sandoval, 6 Star, and Maxx. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645 [intentional misrepresentation elements; specific pleading required]; Small v. Fritz Cos Inc. (2003) 30 Cal.4th 167, 173-174 [negligent misrepresentation elements], 184 [specific pleading required]; FAC, ¶¶ 12, 14, 15, 19-22, 83, 109 [oral misrepresentations by M. Sandoval, for himself and on behalf of 6 Star and Maxx], 25, 30, 84, 85, 89, and 110 [knowledge of falsity / no reasonable grounds for belief in truth]; 24, 25, 84, 85, 90, 98, and 111 [scienter], 23, 27, 28 [reasonable reliance], 19, 92, 97, 101, and 113 [proximately caused damages].)
The FAC sufficiently alleges aiding and abetting misrepresentation as to defendant J. Sandoval. (Casey v. U.S. Bank Nat. Assn., supra at 1145 [elements]; Quelimane Co. v. Stewart Title Guaranty Co., supra at 38 [cause of action is good against a general demurrer so long as it states a cause of action under any theory]; FAC, ¶¶ 80-82, 105-107, 114 [knowledge of tort committed or to be committed by another], 96, 115 [substantial assistance and/or encouragement], 19, 97, 133, 116 [proximately caused damages].)
6th cause of action: breach of common law duty
This cause of action fails to state sufficient facts, as it is duplicative of plaintiff’s third cause of action for concealment, as well as the 8th cause of action for breach of fiduciary duty. Duplicative causes of action are subject to demurrer. (Award Metals, Inc. v. Superior Court (1991) 228 Cal.App.3d 1128, 1135; accord, Couch v. San Juan Unified School Dist. (1995) 33 Cal.App.4th 1491, 1504.)
7th cause of action: breach of statutory duty
This cause of action fails to state sufficient facts. None of the statutes alleged apply to the facts alleged in the FAC. Civ. Code, §§ 2079.2 to 2079.24 impose numerous statutory duties on real estate brokers, including specified duties of disclosure; however, the disclosures are required to be made only to buyers and sellers of property, or prospective buyers and sellers; plaintiff is not alleged to be either.
Civ. Code, § 1102 does not set forth any statutory duty, and the “article” referenced (Article 1.5. Disclosures upon Transfer of Residential Property) also specifies duties and disclosures as to buyers and sellers, or potential buyers and sellers of property. Again, plaintiff is not alleged to be either.
Bus. and Prof. Code, § 10177 provides that the Commissioner of the Department of Real Estate may take various disciplinary actions against brokers for specified violations; there is no indication that it provides for a private right of action.
While plaintiff’s Opposition contends the FAC adequately alleges a violation of Fin. Code, § 22161, this is not alleged. (See Covenant Care, Inc. v. Superior Court (2004) 32 Cal.4th 771, 790 [statutory claims must be specifically pled].)
8th cause of action: breach of fiduciary duty
This cause of action states sufficient facts. (LaMonte v. Sanwa Bank California (1996) 45 Cal.App.4th 509, 517 [elements]; FAC, ¶¶ 12, 21 [M. Sandoval acted as plaintiff’s broker], 12, 14, 19-22, 25, 26, 145 [breach of fiduciary duty via misrepresentations and concealment], 19, 152 [proximately caused damages].) As noted above, a written broker agreement is not required to establish a fiduciary duty. (William L. Lyon & Associates, Inc. v. Superior Court, supra at 1311.)
9th cause of action: violation of Bus. and Prof. Code §§ 17200 et seq.
This cause of action is sufficiently alleged. (Bus. and Prof. Code §§ 17200, 17203 [elements].) As set forth above, fraud, and aiding and abetting fraud, are sufficiently alleged. Entitlement to restitution and injunctive relief is alleged at ¶ 165. That members of the public are likely to be deceived is also alleged. (FAC, ¶¶ 156, 163.)
10th cause of action: violation of Penal Code, § 496, subd. (a)
This cause of action is sufficiently alleged. (Penal Code, § 496, subd. (a) [prohibiting receipt of “property” that “has been stolen or that has been obtained in any manner constituting theft”]; Penal Code, § 7, subds. (10), (12) [defining “personal property” as including “money”]; Penal Code 484, subd. (a) [defining “theft” as including “fraudulently appropriate[d] property which has been entrusted to him or her, or who shall knowingly and designedly, by any false or fraudulent representation or pretense, defraud any other person of money, labor or real or personal property”]; Siry Investment, L.P. v. Farkhondehpour (2022) 13 Cal.5th 333, 361 [fraudulent diversion of funds actionable].)
As set forth above, the FAC adequately alleges that defendants M. Sandoval, 6 Star, and Maxx obtained plaintiff’s funds through fraud, a portion of which was transferred to J. Sandoval through an allegedly fraudulent deed of trust. This is sufficient to allege “theft” under Penal Code, § 484, and thus satisfies Penal Code, § 496, subd. (a).
While moving parties cite Lacagnina v. Comprehend Sys., Inc. (2018) 25 Cal. App. 5th 955, 971, for the proposition that the property must have been stolen at the time it allegedly came into their possession, “[t]hat assertion appears to be erroneous.” (Siry Investment, L.P. v. Farkhondehpour, supra at 353.)
Motion to Compel Responses to Request for Production, Set One.
Defendant Jacquelin Sandoval’s motion to compel plaintiff to provide responses to Request for Production of Documents, Set One, and Sanctions is GRANTED. (Code Civ. Proc., § 2031.300; 2023.010(d); Cal. Rule of Ct. 3.1348)
Defendant J. Sandoval has established that discovery was served and no response has been provided. Plaintiff has not provided any opposition that might address any substantial justification for not responding.
Plaintiff shall provide responses, without objection, within 20 days of this order. Sanctions in the amount of $910 shall be paid by plaintiff to Defendant J. Sandoval through defendant’s attorney within 30 days of this order.
Motion for Summary Judgment.
Defendants M. Sandoval, 6 Star, and Maxx’s motion for summary judgment is DENIED as MOOT. The motion is directed to the original complaint, which is no longer an operative pleading, given the subsequent filing of the FAC. (Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 884 [amended complaint supersedes prior complaint]; State Compensation Insurance Fund v. Superior Court (2010) 184 Cal.App.4th 1124, 1130-1131 [“once an amended complaint is filed, it is error to grant summary adjudication on a cause of action contained in a previous complaint”].) Plaintiff’s request for sanctions is denied.
On its own motion, the court continues the current 11-6-23 trial date to 6-10-24 in Department C-28 at 9:30 a.m.
Plaintiff shall give notice.