Judge: Virginia Keeny, Case: 20VECV01388, Date: 2022-09-20 Tentative Ruling

Case Number: 20VECV01388    Hearing Date: September 20, 2022    Dept: W

MARK A. LIKER V. ELIEZER APPEL, ET AL.

DEMURRER (x2)

Date of Hearing:        September 20, 2022             Trial Date:       None set.  

Department:              W                                            Case No.:        20VECV01388

Defendant Eliezer Appel’s Demurrer to Plaintiff Liker’s Complaint

Moving Party:            Defendant Eliezer Appel

Responding Party:     Plaintiff Mark A. Liker

Meet and Confer:      Decl. of Eliezer Appel, Dem. at p. 7.

Defendant Cochran, Inc.’s Demurrer to Plaintiff Liker’s Complaint

Moving Party:            Defendant Cochran, Inc.

Responding Party:     Plaintiff Mark A. Liker

Meet and Confer:      Decl. of Reza Mohamadzadeh, Dem. at p. 6.

BACKGROUND

Plaintiff Mark A. Liker alleges Defendant Eliezer Appel, in his capacity as a California licensed attorney, instructed Liker to purchase certain real property for $250,000.00. In return, Appel promised plaintiff a return on his investment at a legal rate and promised that plaintiff would take ownership of the real property or that the property would secure plaintiff’s investment.

Plaintiff further alleges Appel concealed from plaintiff “the fact that Plaintiff did not own the property or the company that took title to the property,” and that Appel took plaintiff’s investment for his own gain. (Compl. FR-3(a).)

On November 24, 2020, Plaintiff filed his complaint against defendants Eliezer Appel, Lockhart Development, Inc., and Cochran Inc. asserting a single cause of action for fraud.

On February 11, 2021, Lockhart Development, Inc. filed a cross-complaint against plaintiff Liker; Liker filed a motion to strike the cross-complaint under Code of Civil Procedure section 425.16 (an anti-SLAPP motion) on June 25. Lockhart filed a cross-motion to strike the anti-SLAPP because it was not timely filed. The Court granted Liker’s motion and denied Lockhart’s on July 29, 2021 and dismissed Lockhart’s cross-complaint with prejudice.

Defendant Cochran, Inc. demurred to plaintiff’s complaint on August 25, 2021, and defendant Appel demurred on similar grounds on November 10, 2021. Both demurrers are now before the Court for hearing.

This action is related to Marc A. Larocque v. Christine Larocque Franz, et al. (LC105233).

[Tentative] Ruling

1.      Defendant Appel’s Demurrer to Plaintiff Liker’s Complaint is SUSTAINED with leave to amend.

2.      Defendant Cochran, Inc.’s Demurrer to Plaintiff Liker’s Complaint is SUSTAINED with leave to amend.

ANALYSIS

Defendant Appel’s Demurrer to Liker’s Complaint

Fraud Must Be Pled with Specificity

Defendant Appel first argues plaintiff has failed to state a cause of action for fraud. Specifically, defendant points out that fraud claims must be pled with greater specificity than the law ordinarily requires. Defendant argues plaintiff’s allegations fall short of this standard. In opposition, plaintiff does not disagree with defendant’s characterization of the relevant law; rather, he draws attention to various allegations in his complaint and argues that he has alleged each element of fraud with sufficient specificity.

“Fraud actions have been classed as “disfavored,” and are subject to strict requirements of particularity in pleading.” (5 Witkin, Cal. Procedure (6th ed. 2022) Pleading § 1077.) “Every element of the cause of action for fraud must be alleged in the proper manner and the facts constituting the fraud must be alleged with sufficient specificity to allow defendant to understand fully the nature of the charge made. [Citation.]” (Roberts v. Ball, Hunt, Hart, Brown & Baerwitz (1976) 57 Cal. App. 3d 104, 109.) “This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered.” (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73 (Stansfield), italics in original.)

“ ‘[A]llegations of fraud involve a serious attack on character, and fairness to the defendant demands that he should receive the fullest possible details of the charge in order to prepare his defense.’ ” (Committee On Children's Television, Inc. v. General Foods Corporation (1983) 35 Cal. 3d 197, 216, quoting 3 Witkin, Cal. Procedure (2d ed. 1971) Pleading, § 574.) Thus, “[i]t is essential that the facts and circumstances which constitute the fraud should be set out clearly, concisely, and with sufficient particularity to apprise the opposite party of what he is called on to answer, and to enable the court to determine whether, on the facts pleaded, there is any foundation, prima facie at least, for the charge of fraud.” (Scafidi v. Western Loan & Bldg. Co. (1946) 72 Cal.App.2d 550, 553.)

It follows, for the reasons set forth above, that “ ‘[t]he policy of liberal construction of the pleadings … will not ordinarily be invoked to sustain a pleading defective in any material respect.’” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645, quoting 5 Witkin, Cal. Procedure (6th ed. 2022) Pleading § 1077.)

“The essential elements of fraud, generally, are (1) a misrepresentation; (2) knowledge of falsity; (3) intent to induce reliance; (4) justifiable reliance; and (5) resulting damage. [Citation.]” (City of Industry v. City of Fillmore (2011) 198 Cal.App.4th 191, 211.)

Plaintiff has painted a general picture of what he alleges took place here: that defendant Appel stated that plaintiff could purchase a piece of real property through Appel; that Appel knew he did not actually hold title; that Appel intended plaintiff to trust him and pay for the property, which he did; and that Appel spirited away his money. However, as summarized above, facts that paint a “general picture”, even if they might satisfy pleading standards for other causes of action, are not sufficient to sustain a claim for fraud.

Many of the specifics required by Stansfield, supra, are absent from plaintiff’s complaint. Plaintiff alleges who made the claim – defendant Appel – and, in a general sense, what the claim was – that plaintiff would be purchasing a property for $250,000. But plaintiff does not allege where or when these claims were made, or in what manner. There is, in fact, some confusion about what precisely the claims were, based on plaintiff’s allegations. For example, at paragraph FR-3(a) of the Complaint, plaintiff claims “Eliezer Appel concealed from Plaintiff the fact that Plaintiff did not own the property or the company that took title to the property, that is, the Defendant Lockhart Development, Inc.” It is unclear how defendant would – or could – conceal from plaintiff what plaintiff himself owned. One could infer several possible explanations from plaintiff’s other allegations, but overlapping allegations made only by implication do not satisfy pleading standards, particularly in the case of a fraud complaint. These sorts of generalities must be corrected.

Standing

Defendant Appel further argues that plaintiff does not have standing to bring this suit because the real property in question was purchased by a corporation, Lockhart Development, Inc., of which plaintiff is an officer, not by plaintiff himself. In support of its claim, defendant has attached a Purchase Agreement as Exhibit A to his demurrer, purporting to show that the property was purchased by plaintiff in his capacity as VP and CEO of Lockhart Development.

The grounds for the demurrer must appear on the face of the pleading or from judicially noticeable matters. (Cal. Code. Civ. Proc. § 430.30, subd. (a); Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The evidence defendant offers in support of his argument is inadmissible.

No issue of standing appears on the face of the pleading. Therefore, defendant’s argument in this respect fails. The court observes that the lack of standing, if true, is critical and may be raised by other motion.

Leave to Amend.

As long as a party shows there is “a reasonable possibility any defect identified by the defendant can be cured by amendment,” the trial court should grant leave to amend the pleadings when sustaining a demurrer. (Aubry v. Tri-City Hospital District (1992) 2 Cal.4th 962, 967.)

Plaintiff has yet to amend his complaint even once in this suit. The allegations in his complaint in some cases simply need clarification, or they imply underlying facts that he has failed to lay out specifically. (E.g., the confusing allegations regarding concealment of ownership, above.) In his opposition plaintiff also offers supplemental allegations that persuade the Court there is a reasonable possibility the present deficiencies might be cured by amendment. Plaintiff has demonstrated that a number of more specific facts have simply been left unsaid.

Conclusion

For the reasons set forth above, Appel’s demurrer to Plaintiff’s sole cause of action is sustained with leave to amend.

Defendant Cochran, Inc.’s Demurrer to Liker’s Complaint

Defendant Cochran, Inc. demurs on the same grounds as defendant Appel, with substantially identical arguments. Cochran also makes factual arguments that Liker has no legal relationship to Cochran and no personal interest in the real property transaction that took place between Cochran and Lockhart Development. These factual arguments, while perhaps true, are not flaws in the complaint itself. The problem is that the complaint does not offer enough facts about the alleged real estate transaction or the parties involved.

The grounds for sustaining Appel’s demurrer are equally applicable to Cochran, Inc.’s, as are the grounds for granting leave to amend. The Court reaches an identical result based on the arguments set forth above.

Accordingly, Cochran, Inc.’s demurrer to plaintiff’s sole cause of action is sustained with leave to amend.