Judge: Virginia Keeny, Case: 21VECV01604, Date: 2023-01-26 Tentative Ruling
Case Number: 21VECV01604 Hearing Date: January 26, 2023 Dept: W
AVEDIS DONOYAN v. SOLOMON COHEN, et al.
defendant cohen’s demurrer to the SECOND
amended complaint
Date
of Hearing: January
26, 2023 Trial
Date: None
set.
Department: W Case No.: 21VECV01604
Moving
Party: Defendant Solomon Cohen
Responding
Party: Plaintiff Avedis Donoyan
Meet
and Confer: Yes. (Balonick Decl. ¶1.)
BACKGROUND
This is a quiet title action. Plaintiff
Avedis Donoyan alleges they purchased certain real property from Defendant
Solomon Cohen upon Defendant’s representation that Plaintiff purchasing the
property would be a good financial investment. Upon the short sale being
approved by the Bankruptcy Court, Plaintiff raised monies from his family
members. Plaintiff further alleges they paid $770,000 to Wells Fargo and
$100,000 to Defendant as part of the terms of the short sale. Plaintiff further
alleges Defendant misrepresented to Plaintiff that he would make Plaintiff a
member of an LLC and that it would then be beneficial for Plaintiff to transfer
the property to the LLC. Plaintiff discovered Defendant never made Plaintiff a
member of the LLC and ultimately transferred the property from the LLC back to
Defendant. Plaintiff also alleges Defendant wrongfully caused the LLC to borrow
$800,000 from S&R Income Fund and use the subject property as collateral
without letting Plaintiff know. Plaintiff further alleges Defendant breached an
oral agreement sell the property back to Defendant.
Plaintiff Avedis Donoyan filed a Second
Amended Complaint (“SAC”) against Defendants Solomon Cohen and 4796 Del Moreno
LLC asserting causes of action for (1) Quiet Title; (2) Clearing Cloud on Title;
(3) Fraud; (4) Negligent Misrepresentation; (5) Unjust Enrichment; and (6) Breach
of Contract.
[Tentative] Ruling
Defendant Cohen’s Demurrer to the Second
Amended Complaint is OVERRULED.
REQUEST FOR JUDICIAL NOTICE
Defendant Cohen requests this court take
judicial notice of Plaintiff’s deposition lodged with this court on November 1,
2022 and Plaintiff’s responses to Defendant Cohen’s Special Interrogatories (Bates
#s 234-241).
Plaintiff opposes the request for judicial
notice on the grounds Defendant has again attempted to turn the demurrer
hearing into an evidentiary one. Plaintiff further contends any outside
evidence to be relied upon by the court in a demurrer must be admissions which
clearly contradicts an allegation of the complaint, which is not the case here.
If the court is inclined to grant judicial notice, Plaintiff contends the
demurrer should be put off until Plaintiff can conduct their own discovery and
respond in kind.
Generally, the court may not take
judicial notice of discovery responses. (See TSMC North America v.
Semiconductor Mfg. Intern. Corp. (2008) 161 Cal.App.4th 581, 594.) However,
the Court may take judicial notice of discovery responses “to the extent ‘they contain
statements of the [party] or his agent which are inconsistent with the
allegations of the pleading before the court.” (Bounds v. Superior Court
(2014) 229 Cal.App.4th 468, 477 (quoting Del E. Webb Corp. v. Structural
Materials Co. (1981) 123 Cal.App.3d 593, 605).) “But in doing so, ‘[t]he
hearing on demurrer may not be turned into a contested evidentiary hearing
through the guise of having the court take judicial notice of affidavits,
declarations, depositions, and other such material which was filed on behalf of
the adverse party and which purports to contradict the allegations and
contentions of the plaintiff.’” (Id.)
As such, the court takes judicial notice
of Plaintiff’s deposition testimony and responses to Defendant Cohen’s Special
Interrogatories only to the extent they contradict the allegations in
Plaintiff’s second amended complaint.
discussion
Defendant Cohen demurs to the SAC on the grounds the complaint fails
to allege facts sufficient to state a claim against Defendant Cohen.
Standing
Defendant Cohen first demurs to the complaint on the grounds
Plaintiff Donoyan lacks standing on the grounds Donoyan admits that he never
used his own money for the loan to purchase the property.
“Every action must be prosecuted in the name of the real party in
interest, except as otherwise provided by statute.” (CCP § 367.) Generally, the
real party in interest is the person who has the¿right to sue under the
substantive law. (Gantman v. United
Pac. Ins. Co. (1991) 232 Cal.App.3d 1560, 1566.) A complaint filed by
someone other than the real party in interest is subject to general demurrer on
the ground that it fails to state a cause of action. (Doe v. Lincoln
Unified School Dist. (2010) 188 Cal.App.4th 758.)
To support their contention, Defendant presents Plaintiff’s
deposition where he testifies his family was owed the money.
Q How did you know that?
A Solomon told -- probably told
me. I'm not sure, but Solomon probably told me because we were close at the
time.
Q You're not close anymore?
A Not anymore.
Q Okay. And that's because he
won't pay back your family members?
A Correct.
Q Because that's who is owed the
money?
A Yes.
Q Got it. Now, the family members
had loaned the money -- had loaned plaintiff money to finance plaintiff's
purchase of the subject property?
A Yes.
Q Okay. But the deal was that
Solomon was supposed to pay back your family members, not you, right?
A Indirectly, yes, but I -- he
owed me the money because I gave him the money.
Q Okay.
A The deal that Solomon and my
family member had, I don't know anything about it. (Deposition, 59:1-25.)
In opposition, Plaintiff argues Defendant has previously raised
this issue and the court had already determined that “Defendant has failed to demonstrate
that Plaintiff lacked standing as Plaintiff alleges that they were supposed to
be the owner of the Subject Property through the LLC.” Plaintiff further argues
while his family did raise the money for the transaction the money went into
his account, and he made the payment.
Defendant has previously made this argument and the court has
already ruled on the matter. The court previously found Plaintiff established
standing as Plaintiff alleges that they were supposed to be the owner of the
Subject Property through the LLC. The fact that the money came from his family
is irrelevant. Plaintiff could have obtained a loan from a bank or another loan
provider and that would not change the fact that Defendant allegedly made
representations to Plaintiff that he would be the owner of the Subject Property
through the LLC.
Accordingly, the court overrules the demurrer for lack of
standing.
Sham Pleading
Defendant next demurs to the complaint on the grounds the
agreement alleged keeps changing not only from when the Defendant allegedly
breached the deal (noticeably, there is no specific year as to when any
agreement was breached), but the deal changes as well.
The court finds Defendant has failed to demonstrate any of the
amendments to the complaint amount to sham pleadings. “Under the sham
pleading doctrine, plaintiffs are precluded from amending complaints to omit
harmful allegations, without explanation, from previous complaints to avoid
attacks raised in demurrers or motions for summary judgment.” (Deveny v.
Entropin, Inc. (2006) 139 Cal.App.4th 408, 425.) For example, the
first amended complaint alleged Plaintiff believed until August 2021 he was the
sole owner of the LLC. (FAC ¶46.) Now Plaintiff alleges he had no reason to
suspect, prior to an investigation in Spring/Summer 2021, that Plaintiff was
not listed in the Subject Property’s deed as owner through the LLC. (SAC ¶38.)
Although more vague, these allegations are not inconsistent nor does Plaintiff
omit any harmful investigations. Plaintiff maintains that either Spring/Summer
2021, or more specifically, August 2021 is when he discovered he was no longer
listed as owner of the Subject Property through the LLC.
Quiet Title
Defendant demurs to the first cause of action on the grounds the
statute of limitations has run.
The applicable statute of limitations for actions to quiet title
depend on the underlying theory of relief. (See Salazar v. Thomas (2015)
236 Cal.App.4th 467, 476.) Generally, the time limit for a quiet title action
is the four-year limitations period for cancellation of an instrument or the
three-year limitations period for fraud. (See id.) The limitations
period begins to run when the plaintiff is not in exclusive and undisputed
possession of the property. (See id. at 477-78.) “[M]ere notice of an
adverse claim is not enough to commence the owner’s statute of limitations.” (Id.)
Defendant argues Plaintiff has pleaded that he transferred the
property out of his name and into Defendant’s LLC on November 1, 2015. (Compl.
¶20.) Plaintiff further pleaded that the November 1, 2015 Grant Deed was null
and void based on Defendant’s fraud in the inception. (Compl. ¶78.) As a
result, the statute of limitations ran three years from November 2015 and
therefore, the 2021 filing makes the action untimely.
The court previously sustained Defendant’s statute of limitations
argument on the grounds while taking Plaintiff’s allegations as true, Plaintiff
has failed to sufficiently allege their inability to have made the discovery
earlier. (Minute Order, April 25, 2022.) The court noted “[w]hile Plaintiff
alleges they found out about the fraud during negotiations between Plaintiff,
Plaintiff’s family members, and Defendant regarding the purchase of the subject
property. (FAC ¶48), Plaintiff fails to allege why they did not discover the
fraud occurred when Defendant first created the LLC or transferred the property
to the LLC.” (Minute Order, April 25, 2022.)
Plaintiff now alleges in Spring of 2021, Defendant Cohen wanted to
change the contract between the parties. (SAC ¶65.) The parties disagreed about
what had been previously paid by Cohen toward the amount which would be due
Plaintiff, but in the interest of resolving this matter, Plaintiff, acting
through family members, agreed to accept the amounts claimed by Defendant. (SAC
¶65.) Eventually Defendant Cohen refused to go through with the deal and as a
result, Plaintiff and his family then became suspicious of Defendant’s supposed
commitment to honor his verbal contract with Plaintiff to either pay for the
subject property or to work out an alternative arrangement. (SAC ¶65.) As a
result of these suspicions, in the Spring/Summer of 2021, Plaintiff and his
family members and representatives researched the status of the LLC. (SAC ¶66.)
This is when Plaintiff first discovered Defendant’s conduct. The court finds
these allegations sufficient to support the delay in discovery. Based on the
parties’ relationship, Plaintiff felt no need to look into the status of the
LLC when Plaintiff transferred title to the subject property in 2015.
Accordingly, the demurrer to the first cause of action is
OVERRULED.
Fraud
Defendant demurs to the fraud cause of action on the grounds it is
time barred and lacks the requisite specificity.
The statute of limitations for fraud is three years. (CCP
§338(d).) Unless a complaint affirmatively discloses on its face that the
statute of limitations has run, demurrer must be overruled. (See Lockley v.
Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91
Cal.App.4th 875, 881 [“It must appear clearly and affirmatively that, upon the
face of the complaint, the right of action is necessarily barred”]; see also Moseley
v. Abrams (1985) 170 Cal.App.3d 355, 359 [“A demurrer on the ground of the
bar of the statute of limitations will not lie where the action may be, but is
not necessarily barred”].)
Defendant argues based on Plaintiff’s poor and insufficient
pleading, it is impossible to know when the fraud occurred. However, based on
the allegations, it is not clear on the face of the complaint that the statute
of limitations has run. Nonetheless, Plaintiff has sufficiently alleged he
discovered the conduct in 2021. Moreover, the court has previously found
Plaintiff’s have sufficiently alleged a fraud cause of action for the purposes
of a demurrer.
Accordingly, Defendant’s demurrer to the second cause of action is
OVERRULED.
Breach of Contract
Defendant demurs to the breach of contract cause of action on the
grounds the action is time barred and the agreement is barred by the statute of
frauds.
Breach of written contract claims are subject to a four-year
statute of limitations. (See CCP §337(1).) Breach of oral contract claims are
subject to a two-year statute of limitations. (See CCP §339(1).)
Defendant contends Plaintiff’s allegations that Defendant breached
the agreement to purchase the property in 2021 makes no sense because why would
there be an agreement to repay the debt and purchase the property and for what
price and when? At the demurrer stage, Plaintiff need not prove there was actually
a $5,000 partial payment. The court accepts Plaintiff’s allegations as true and
Defendant has not demonstrated through judicially noticed documents that
Plaintiff’s allegations are false. Moreover, the court has already addressed
Defendant’s statute of fraud contention on the prior demurrer.
Accordingly, Defendant’s demurrer to the breach of contract cause
of action is OVERRULED.