Judge: Upinder S. Kalra, Case: 22STCV15086, Date: 2022-09-22 Tentative Ruling
Case Number: 22STCV15086 Hearing Date: September 22, 2022 Dept: 51
Tentative Ruling
Judge Upinder S.
Kalra, Department 51
HEARING DATE: September
22, 2022
CASE NAME: Rosa
Blanca Guzman v. Jose Edwin Madrid
CASE NO.: 22STCV15086
DEFENDANT’S
DEMURRER WITHOUT MOTION TO STRIKE
MOVING PARTY: Defendant Jose Edwin Madrid
RESPONDING PARTY(S): Plaintiff Rosa Blanca Guzman
REQUESTED RELIEF:
1. An
order sustaining a demurrer as to the second, third, fourth, fifth, and sixth
causes of action.
TENTATIVE RULING:
1. Demurrer
as to the Second, Fourth, and Fifth Causes of Action are OVERRULED.
2. Demurrer
as to the Third and Sixth Causes of Action are SUSTAINED, without leave to
amend.
STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:
On May 6, 2022, Plaintiff Rosa Blanca Guzman (“Plaintiff”)
filed a complaint against Defendant Jose Edwin Madrid, an all persons unknown,
claiming, any legal or equitable right, title, estate, lien, easement, or
interest in the property described in the complaint adverse to the Plaintiff’s
title, claims or rights, or any cloud on Plaintiff’s title, claims, or rights
thereto (“Defendant.”) The complaint alleged six causes of action: (1) Fraud,
(2) False Promise, (3) Constructive Fraud, (4) Negligent Misrepresentation, (5)
Quiet Title, and (6) Declaratory Relief. The complaint alleges that Plaintiff
purchased the Subject Property with Defendant, based on Defendant’s false
representation that he would assist Plaintiff with the mortgage, taxes, and
other contributions to the property.
On June 28, 2022, Defendant filed a Cross-Complaint.
On June 30, 2022, Defendant filed the current Demurrer
without Motion to Strike. Plaintiff’s Opposition was filed on August 29, 2022.
LEGAL STANDARD
A demurrer for
sufficiency tests whether the complaint states a cause of action. Hahn v. Mirda (2007) 147
Cal.App.4th 740, 747. When considering demurrers, courts read the allegations
liberally and in context. In a demurrer proceeding, the defects must be
apparent on the face of the pleading or via proper judicial notice. Donabedian v. Mercury Ins. Co.
(2004) 116 Cal.App.4th 968, 994; Weil & Brown, Civ. Pro. Before Trial (The
Rutter Group 2011) ¶7:8. “A demurrer tests the pleadings alone and not the
evidence or other extrinsic matters. Therefore, it lies only where the defects
appear on the face of the pleading or are judicially noticed (Code Civ. Proc.,
§§ 430.30, 430.70). The only issue involved in a demurrer hearing is whether
the complaint, as it stands, unconnected with extraneous matters, states a
cause of action.” Hahn 147
Cal.App.4th at 747.
ANALYSIS:
Defendant demurs to the Second, Third, Fourth, Fifth and
Sixth causes of action on the grounds that they fail to state causes of action
and are uncertain.
1.
Second
Cause of Action: False Promise
Defendant contends that the second cause of action, as well
as the third, and fourth causes of action – all based on fraud – are claims for
breach of contract. The facts alleged concern an oral agreement that was
allegedly breached. Moreover, these claims also fail under the statute of fraud
since these causes of action are based on an oral agreement that concern an
interest in real property.
“Promissory fraud or false promise “ ‘is a subspecies of the
action for fraud and deceit…The elements of promissory fraud ... are: (1) a promise made regarding a
material fact without any intention of performing it; (2) the existence of the
intent not to perform at the time the promise was made; (3) intent to deceive
or induce the promisee to enter into a transaction; (4) reasonable reliance by
the promisee; (5) nonperformance by the party making the promise; and (6)
resulting damage to the promise[e].” (Rossberg v. Bank of
America, N.A. (2013) 219 Cal.App.4th 1481, 1498 [162
Cal.Rptr.3d 525, 539], as modified on denial of reh'g (Sept. 26, 2013) “As with any other form of fraud, each element of a promissory
fraud claim must be alleged with particularity.” (Id.).
“[T]he intent element of
promissory fraud entails more than proof of an unkept promise or mere failure
of performance. We note also that promissory fraud, like all forms of fraud,
requires a showing of justifiable reliance on the defendant's
misrepresentation.” (Riverisland Cold
Storage, Inc. v. Fresno-Madera Production Credit Assn. (2013) 55 Cal.4th
1169, 1183). 2..
“[W]hen averments of fraud are made, the circumstances
constituting the alleged fraud must be specific enough to give defendants
notice of the particular misconduct so that they can defend against the charge
and not just deny that they have done anything wrong.” Vess v. Ciba–Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir.2003)
(internal quotations and citations omitted). The allegations “must be
accompanied by ‘the who, what, when, where, and how’ of the misconduct
charged.” (Arikat v. JP Morgan Chase & Co. (N.D.
Cal. 2006) 430 F.Supp.2d 1013, 1022).
After
reviewing the Complaint, Plaintiff has sufficiently alleged false promise. The
complaint states that in November and December of 1998 (when), through multiple
communications (how), in Los Angeles, California (where), Madrid represented to
Plaintiff (who), that he would “assist Plaintiff in obtaining the loan
necessary to purchase the Property, and he would deed the Property to Plaintiff
upon her request.” (Comp. ¶ 18.) Moreover, the elements necessary for fraud
have been met. First, the promise was made that Defendant would help Plaintiff
obtain necessary loans to purchase the property and would deed the property.
(Comp. ¶ 6, 19.) Second, Plaintiff alleges that Defendant did not intend to
deed the property after Plaintiff had contributed all expenses, such as
mortgage and property taxes. This was evident when Defendant demanded fifty
percent of the property in February 2022. (Comp. ¶ 9, 10, 13.) Third, the
complaint alleges that Defendant knew these representation, concerning
assisting Plaintiff, were false when they were made. (Comp. ¶ 11, 19-20.) Fourth,
Plaintiff relied on these statements when Defendant made them to her. (Comp. ¶
12, 21.) Fifth, Defendant did not perform on the promise, specifically when he
demanded fifty percent of the property. (Comp. ¶ 13, 22.) Lastly, the complaint
alleges that Plaintiff was damaged and harmed as a result; Plaintiff solely
contributed monetarily to the purchase and maintenance of the subject property.
(Comp. ¶ 14, 23.)
Demurrer
as to the Second Cause of Action is OVERRULED.
2.
Third
Cause of Action: Constructive Fraud
Defendant makes the same argument
for this cause of action as it did above as it relates to the fraud causes of
action.
“Constructive fraud ‘arises on a
breach of duty by one in a confidential or fiduciary relationship to another
which induces justifiable reliance by the latter to his prejudice.’ [Citation.]
Actual reliance and causation of injury must be shown… Constructive fraud
exists in cases in which conduct, although not actually fraudulent, ought to be
so treated—that is, in which such conduct is a constructive or quasi fraud,
having all the actual consequences and all the legal effects of actual fraud.”
(Prakashpalan v. Engstrom, Lipscomb &
Lack (2014) 223 Cal.App.4th 1105, 1131, as modified on denial of reh'g
(Feb. 27, 2014).) “Constructive fraud is a unique species of fraud applicable
only to a fiduciary or confidential relationship.” (Salahutdin v. Valley of California, Inc. (1994) 24 Cal.App.4th 555,
562.)
After reviewing the complaint,
Plaintiff has not sufficiently pled a cause of action for constructive fraud
because the complaint does not contain any allegations that Plaintiff and
Defendant had either a fiduciary or confidential relationship. The only
allegations concerning the parties relationship is that Defendant was a
“trusted friend.” (Comp. ¶ 12.) This is insufficient for a cause of action for
constructive fraud.
Demurrer as to the Third Cause
of Action is SUSTAINED.
3.
Fourth
Cause of Action: Negligent Misrepresentation
Defendant
makes the same argument for this cause of action as it did above as it relates
to the fraud causes of action.
“The
elements of negligent misrepresentation are “(1) the misrepresentation of a
past or existing material fact, (2) without reasonable ground for believing it
to be true, (3) with intent to induce another's reliance on the fact
misrepresented, (4) justifiable reliance on the misrepresentation, and (5)
resulting damage.” (National Union Fire
Ins. Co. of Pittsburgh, PA v. Cambridge Integrated Services Group, Inc.
(2009) 171 Cal.App.4th 35, 50).
After
reviewing the complaint Plaintiff has sufficiently alleged the necessary facts
to state a cause of action for negligent misrepresentation. First, the
complaint alleges that Defendant made a representation about aiding Plaintiff
as it relates to the Subject Property. (Comp. ¶ 30.) Second, the complaint also
alleges that Defendant did not have reasonable grounds for believing that the
representation was true. (Comp. ¶ 31.) As for the remaining three elements,
these have already been established as stated above: Defendant intended to
induce reliance on these representations (Comp. ¶ 11,
19-20, 32), Plaintiff relied on these statements
(Comp. ¶ 12, 21, 33), and Plaintiff suffered damage (Comp. 14, 23, 34.)
Demurrer
as to the Fourth Cause of Action is OVERRULED.
4.
Fifth
Cause of Action: Quiet Title
Defendant contends that this cause of action for quiet title
fails because it is barred under the Statute of Frauds. Plaintiff asserts that
defendant’s claim for title is fraudulent; however, because the fraud claim is
a breach of oral contract claim, statute of fraud bars it and thus this claim
fails. Plaintiff argues that the complaint sufficiently alleged an action for
quiet title; Defendant’s fraudulent misrepresentations made Plaintiff purchase
the property
To establish a quiet title action under CCP § 761.020, the
complaint must include:
“(a) a description of the property
that is the subject of the action, (b) the title of the plaintiff as to which a
determination under this chapter is sought and the basis of the title, (c) the
adverse claims to the title of the plaintiff against which a determination is
sought, (d) the date as of which the determination is sought, and (e) a prayer
for the determination of the title of the plaintiff against the adverse
claims.”
Further,
In an
action to quiet title, the complaint should allege,¿inter alia,¿the interest of the plaintiff in the property at the
time the action is commenced. [Citation] If plaintiff owns the property in fee,
a general allegation of ownership of the described property is sufficient.
[Citation] However, a general allegation of ownership is treated as a
conclusion if the detailed facts upon which the claim of ownership is
predicated are also alleged, and in such case, the specific facts will control
rather than the general allegation in determining whether the complaint states
sufficient facts to constitute a cause of action. [Citations] Actually, in such
circumstances only one cause of action is stated. [Citation] Accordingly, if
the specifically pleaded facts affirmatively reveal the absence of an essential
element in a plaintiff's claim of title, no cause of action is stated.¿
(Stafford v.
Ballinger (1962) 199 Cal. App. 2d 289, 292.)
After reviewing the complaint,
Plaintiff has sufficiently alleged a cause of action for quiet title. Here, the
description of the property is alleged to be located at 941 Fraser Avenue, in
Los Angeles California. (Comp. ¶ 5.) Further, the complaint alleges that
Plaintiff purchase the property, as is evident by the Deed of Trust and Grant
Deed attached to the complaint. (Comp. Ex. 2-3.) Defendant claims 50% of the
value of the property. (Comp. ¶ 13.) Had Defendant not fraudulently
misrepresented to Plaintiff that he would provide assistance, Plaintiff would
not have purchased the property, allowed Defendant to hold title, or pay the
consideration for the property. (Comp. ¶ 5.) The complaint also states that
Plaintiff seeks quiet title as of January 8, 1999. Lastly, the Complaint
contains a prayer for relief, that a judgment be rendered stating Plaintiff is
the owner of the fee simple title to Property and Defendant no longer has any
interest or legal right to the property. (Comp. ¶ 4, prayer for relief.)
Demurrer as to the Fifth Cause of Action is OVERRULED.
5.
Sixth
Cause of Action: Declaratory Relief
Defendant makes the same arguments
as made under the Quiet Title cause of action.
“To qualify for declaratory relief
under section 1060, plaintiffs were required to show their action (as refined
on appeal) presented two essential elements: “(1) a proper subject of
declaratory relief, and (2) an actual controversy involving justiciable
questions relating to the rights or obligations of a party.” (Lee v. Silveira (2016) 6 Cal.App.5th
527, 546) ““Declaratory relief operates prospectively to declare future rights,
rather than to redress past wrongs.” (County
of San Diego v. State of California (2008) 164 Cal.App.4th 580, 607).
After reviewing the complaint,
Plaintiff has sufficiently alleged facts for declaratory relief. The complaint
sufficiently alleges a dispute between the parties as it relates to title of
the Subject Property.
Demurrer as to the Sixth Cause
of Action is OVERRULED.
Leave to Amend:
Leave to amend should
be liberally granted if there is a reasonable possibility an amendment could
cure the defect. (County of Santa Clara v. Superior Court (2022) 77 Cal.App.5th 1018,1035.)
The Plaintiff has the
burden of demonstrating that leave to amend should be granted, and that the
defects can be cured by amendment. (“Plaintiff must show in what manner he can
amend his complaint and how that amendment will change the legal effect of his
pleading.” Goodman v. Kennedy (1976)
18 Cal.3d 335, 349). Plaintiff did request leave to amend in the alternative.
However, Plaintiff did not establish how the complaint can be amended. As for
the constructive fraud cause of action, it is unlikely that leave to amend will
fix the defects because the Complaint already alleges that the parties were
trusted friends and is unlikely to allege a fiduciary or confidential
relationship.
Conclusion:
For
the foregoing reasons, the Court decides the pending motion as follows:
Demurrer as
to the Second, Fourth, and Fifth Causes of Action are OVERRULED.
Demurrer as
to the Third and Sixth Causes of Action are SUSTAINED, without leave to amend.
Defendant to file an Answer only within 20 days of service
of this order by Plaintiff.
IT IS SO ORDERED.
Dated: September
22, 2022. __________________________________ Upinder
S. Kalra
Judge
of the Superior Court