Judge: Virginia Keeny, Case: 23STCV15353, Date: 2025-01-14 Tentative Ruling
Case Number: 23STCV15353 Hearing Date: January 14, 2025 Dept: 45
Virginia
Rockewell & daniel mccallum v. robert m. ladesich, et al.
demurrer
Date of Hearing: January 14, 2025 Trial Date: August 25, 2025
Department: 45 Case
No.: 23STCV15353
Moving
Parties: Defendants Coldwell
Banker Residential Brokerage Company and Jonathan Macht
Responding
Party: None
BACKGROUND
On January
11, 2024, Plaintiffs Virginia Rockwell (“Rockwell”) and Daniel McCallum
(“McCallum”) (collectively, “Plaintiffs”) filed the operative Second Amended
Complaint (“SAC”) against Defendants Robert M. Ladesich, as trustee for the
Ladesich Family Trust dated December 24, 1986, as restated and amended on July
13, 2007, Joseph Charles Ladesich, as trustee for the Ladesich Family Trust
dated December 24, 1986, as restated and amended on July 13, 2007, Jonathan
Macht (“Macht”), an individual residing in California, Coldwell Banker
Residential Brokerage Company (“Coldwell”), a California corporation, and DOES
1 through 10, inclusive for (1) Breach of Contract; (2) Breach of Implied
Covenant of Good Faith and Fair Dealing; (3) Breach of Duties; (4) Tortious
Interference; (5) Fraudulent Intentional Misrepresentation; (6) Fraudulent
Concealment; and (7) Negligent Misrepresentation.
The SAC
alleges the Ladesich Defendants granted Plaintiffs the exclusive right to
purchase the real property located on 725 Via de la Paz, Pacific Palisades, CA
90272 (“Property”) under a Lease Agreement. (SAC ¶¶11, 14.) By April 23, 2022,
the Parties had reached mutually acceptable terms for the sale of the Property
from the Ladesich Defendants to Plaintiffs for $3.8 million. (SAC ¶20.) The
Ladesich Defendants entertained competing offers during the exclusivity period
and attempted to seek $150,000.00 above asking price. (SAC ¶¶22-23.)
On February 7,
2024, Coldwell and Macht filed the instant demurrer to the SAC.
No opposition
has been filed.
[Tentative] Ruling
1.
Defendants Coldwell’s and Macht’s
demurrer is overruled in its entirety.
LEGAL STANDARD
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.)
When a demurrer is sustained, leave to amend must be allowed where
there is a reasonable possibility of successful amendment. (Goodman v.
Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the plaintiff to show
the court that a pleading can be amended successfully. (Ibid.; Lewis
v. YouTube, LLC (2015) 244 Cal.App.4th 118, 226.)
Meet and Confer
Before filing a
demurrer, the demurring or moving party is required to meet and confer in
person or by telephone with the party who filed the pleading demurred to or the
pleading that is subject to the motion to strike for the purposes of
determining whether an agreement can be reached through a filing of an amended
pleading that would resolve the objections to be raised in the demurrer. (Code
Civ. Proc., § 430.41.)
Here, counsel for
Coldwell and Macht emailed counsel for Plaintiffs on February 5, 2024 to meet
and confer regarding the supposed deficiencies with the SAC. (Shulkin Decl., ¶
4.) However, counsel does not state that he met and conferred with Plaintiffs’
counsel either in person or over the phone, and thus, the meet and confer
requirement has not been satisfied. The Court admonishes counsel for Coldwell
and Macht for not properly adhering to the meet and confer requirement.
ANALYSIS
Coldwell and Macht demur to all causes of actions pleaded
against Coldwell, which includes Plaintiffs’ third cause of action for Breach
of Duty, fourth cause of action for Tortious Interference, fifth cause of
action for Intentional Misrepresentation, sixth cause of action for Fraudulent Concealment,
and seventh cause of action for Negligent Misrepresentation, as the allegations
fail to state actionable claims against Coldwell.
Tortious
Interference
Plaintiffs
claim that Coldwell prevented Plaintiffs from receiving the rights of purchase
priority and exclusivity under the Lease Addendum. Coldwell allegedly did this
by: (1) allowing or facilitating the Ladesich Defendants’ ability to entertain
competing offers while Plaintiffs’ $3.8 million offer was in play, and (2)
assisting with or furthering the Ladesich Defendants’ alleged lack of “good
faith” negotiation by conveying to the Plaintiffs a $3,950,000 counter-offer.
(SAC, ¶¶ 48-51.)
The
elements of an action for tortious interference are “‘(1) a valid contract
between plaintiff and a third party; (2) defendant's knowledge of this
contract; (3) defendant's intentional acts designed to induce a breach or
disruption of the contractual relationship; (4) actual breach or disruption of
the contractual relationship; and (5) resulting damage.’ (Citation).” (Hahn v. Diaz-Barba (2011) 194 Cal.App.4th 1177, 1196.)
“It has been repeatedly held that a plaintiff, seeking to hold one liable for
unjustifiably inducing another to breach a contract, must allege that the
contract would otherwise have been performed.” (Dryden v. Tri–Valley Growers (1977) 65 Cal.App.3d 990, 997.)
Coldwell
and Macht contend that Plaintiffs’ tortious interference claim fails to state a
valid claim for relief because Coldwell did not interfere with Plaintiffs’
ability to avail of a “right of first refusal” afforded by the Lease Addendum was
the Addendum never provided Plaintiffs the rights to be an exclusive bidder.
The
Lease Addendum states in pertinent part:
In
the event the landlords decide to sell the property during the tenants’ lease
term or extension thereof – the tenants shall have the right of first refusal.
This shall include a good faith attempt by landlords and tenants to reach
mutually acceptable terms prior to offering the house for sale to other
parties. If mutually accepted terms are not reached within ten (10) days, the
tenants shall have the right to match any legitimate purchase offer that the
landlords receive within fourteen (14) days of receipt thereof from landlord,
prior to landlord’s accepting any outside offer. (SAC, Exhibit A.)
Here, Plaintiffs have
alleged that on April 19, 2022, Plaintiff’s real estate representative received
an offer from Macht, who was Ladesich Defendants’ real estate representative,
for the purchase and sale of the Property for $3.8 million, under the terms of
the Lease Addendum (April 19 communication). (SAC ¶ 16, Exhibit C.) On April 20, 2022, both
representatives discussed the Ladesich Defendants’ obligation to negotiate in
good faith for the sale and purchase of the Property, per the Lease Addendum. (Id.
¶ 17.) Plaintiffs’ representative produced an offer on Plaintiffs’ behalf,
outlining Ladesich’s Defendants’ terms in the April 19 communication, by
emailing Macht an executed California Purchase Agreement (RPA) (April 22 offer).
(Id. ¶ 18, Exhibits D & E.) On April 23, 2022, Macht contacted
Plaintiffs’ representative that Ladesich Defendants had accepted and would be
signing shortly. (Id. ¶ 19.) Two days later, Macht told Plaintiffs’
representative that the Ladesich Defendants are now desiring $150,00 above the
price that Plaintiffs had agreed to due to “new information that [had] come to
light [on April 25, 2022] combined with current market conditions.” (Id. ¶
22, Exhibit H.) However, Plaintiffs allege that Ladesich Defendants and Macht
were entertaining competing offers within the ten (10) day “Exclusivity
Period.” (Id. ¶ 23.)
Coldwell claims that the
Lease Addendum does not afford Plaintiffs the rights of an exclusive bidder.
However, the Lease Addendum states that there “must be a good faith attempt by
landlords and tenants to reach mutually acceptable terms prior to offering the
house for sale to other parties.” (SAC, Exhibit A.) Here, Plaintiffs have
sufficiently alleged that mutually agreeable terms were indeed reached by
Plaintiffs’ April 22 offer, which outlined the agreed upon terms of the April
19 communication, and Macht’s communication that Ladesich Defendants had
accepted April 22 offer. (Id., Exhibits E & F.) Thus, Plaintiffs
have sufficiently alleged rights under the Lease Addendum and that a valid
contract existed between them and a third party (Ladesich Defendants), required
for their Tortious Interference cause of action against Coldwell.
Additionally,
Plaintiffs have sufficiently alleged Coldwell’s knowledge as to the contract
(Coldwell represented Ladesich Defendants in the transaction); Coldwell’s
intentional acts designed to induce a breach (“facilitating the bad
faith negotiation for the sale and purchase of the Agreement by considering and
entertaining competing offers in violation of the Lease Agreement”); actual
breach (Ladesich Defendants “demanding a price of $150,000 more than
had been mutually agreed to”); and resulting damage
(the $150,00 difference in the agreed upon purchase price within the April 19 communication
and April 22 offer, and the subsequent increased counter offer from Ladesich
Defendants). (SAC ¶¶ 24, 48-56.)
Coldwell
and Macht’s demurrer is overruled as to the cause of action for Tortious
Interference.
Fraudulent
and Negligent Misrepresentation
As
to intentional misrepresentation, Plaintiffs must sufficiently plead: “(a)
misrepresentation (false representation, concealment, or nondisclosure); (b)
knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to
induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Engalla
v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 974).
As to
negligent misrepresentation, California law provides that a representation need
not be knowingly false to be actionable. Negligent misrepresentation occurs
when a false statement is made as a fact without reasonable grounds for
believing it to be true, and the plaintiff relies on it to their detriment.
(B.L.M. v. Sabo & Deitsch (1997) 55 Cal.App.4th 823, 834).
Plaintiffs
have pleaded a misrepresentation: Macht falsely misrepresented that Ladesich
Defendants “will be accepting [Plaintiffs’] offer” and that the $150,000 price
increase was due to “market conditions” and “new information.” Plaintiffs
specifically alleged that Coldwell “falsely and fraudulently misrepresented the
reason that caused the $150,000 price increase on the Property within such a
short amount of time.” (SAC ¶¶ 58-60, Exhibit F.)
Plaintiffs
have pleaded knowledge and intent: “Macht, Coldwell and the Ladesichs had
actual knowledge of the falsity of the statements made regarding the $150,000
price increase on the Property within twenty-four hours, but, nevertheless,
intended to defraud and injure Plaintiffs and to induce Plaintiffs’ reliance
upon the false representations made in order to induce Plaintiffs to purchase
the Property.” (SAC ¶ 61.)
Plaintiffs
have pleaded justifiable reliance: “Plaintiffs justifiably relied upon Macht,
Coldwell and the Ladesichs’ false representations regarding the reason for the
$150,000 price increase,” given that Plaintiffs “would not have purchased the
Property at the higher asking price of $3,950,000 and would have instead
demanded Macht, Coldwell and the Ladesichs perform on the original mutually
acceptable terms and record a lis pendens if they refused to do so.” (SAC ¶
63.)
Plaintiffs
have pleaded resulting damage: “Plaintiffs have incurred damages, including,
but not limited to economic injury in the sum of at least $150,000,” which
represents the difference in the agreed upon purchase price within the April 19
communication and April 22 offer, and the subsequent increased counter offer
from Ladesich Defendants. (SAC ¶ 64.)
Coldwell
argues that Plaintiffs may not justifiably rely on the Macht communication
stating that Ladesich Defendants agreed to the April 19 purchase price, since
that underlying agreement would not comport with the Statute of Frauds and thus
is unenforceable. Coldwell argues that public policy prevents a Plaintiff from
prosecuting a fraud suit based upon Ladesich Defendants’ false oral promise to
sign a contract.
“Reliance exists when the misrepresentation or nondisclosure was an
immediate cause of the plaintiff's conduct which altered his or her legal
relations, and when without such misrepresentation or nondisclosure he or she
would not, in all reasonable probability, have entered into the contract or
other transaction. (Manderville v. PCG&S Grp., Inc.
(2007) 146 Cal.App.4th 1486, 1498.) “Except in the rare case where the
undisputed facts leave no room for a reasonable difference of opinion, the
question of whether a plaintiff's reliance is reasonable is a question of fact
(citation).” (All. Mortg. Co. v. Rothwell (1995) 10 Cal.4th 1226,
1239.) “However, whether a party's reliance was justified may be decided as a
matter of law if reasonable minds can come to only one conclusion based on the
facts (citation).” (Ibid.)
Coldwell
cites Phillippe v. Shapell Industries (1987) 43 Cal.3d 1247. There, a
licensed real estate broker brought an action to recover commission from a real
property purchaser. The Court found that any commission agreement between a
broker and purchaser is subject to the Statute of Frauds, and that the broker
could not have reasonably relied on an oral promise of compensation. (Phillippe,
supra, 43 Cal.3d at pp at 1257-59.) However, unlike the broker in Phillippe,
who attempted to rely on the purchaser’s oral promise of compensation, Plaintiffs
here have not alleged relying on Ladesich Defendants’ oral promise of accepting
the April 22 offer but rather have alleged relying on Macht’s written
communication that the April 22 offer was accepted.
The
fact that one of Plaintiffs is an attorney does not alter the analysis, given
that Plaintiffs have alleged they relied on Macht’s factual misrepresentation
that Ladesich Defendants indeed accepted the April 22 offer, rather than a
representation of merely Macht’s opinion. While “[s]tatements or predictions regarding
future events are deemed to be mere opinions which are not actionable,” Macht’s communication
explicitly stated that Ladesich Defendants have accepted the April 22 offer. (Cansino v. Bank of Am. (2014) 224 Cal.App.4th 1462, 1469.)
Coldwell
additionally argues that Macht’s communication that Ladesich Defendants want to
“counter offer” the April 22 offer, given “new information” that “came to
light” including “current market conditions” is not actionable because the
representation is merely an implied representation.
Firstly,
the requirement for a positive assertion is only applicable to a cause of
action for negligent misrepresentation. (Apollo Cap. Fund, LLC v. Roth
Cap. Partners, LLC (2007) 158 Cal App.4th 226, 243 [“In contrast to
fraud, negligent misrepresentation does not require knowledge of falsity . . .
However, a positive assertion is required; an omission or an implied assertion
or representation is not sufficient.”]; see Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 174,
132 Cal.Rptr.2d 490, 65 P.3d 1255 (Small ) [negligent misrepresentation
“encompasses ‘[t]he assertion, as a fact, of that which is not true, by one who
has no reasonable ground for believing it to be true’ [citation], and ‘[t]he
positive assertion, in a manner not warranted by the information of the person
making it, of that which is not true, though he believes it to be true’
[citations]]”.)
As
for whether Macht’s communication of Ladesich Defendants’ “counter offer” is an
implied representation in the context of Plaintiffs’ Negligent
Misrepresentation cause of action, it is not. Plaintiffs have specifically
pleaded that “Macht, Coldwell and the Ladesichs falsely and
fraudulently misrepresented the reason that caused the $150,000 price increase
on the Property within such a short amount of time.” (SAC, ¶ 60.0) The Macht
communication that new information has come to light combined with current market
conditions is an affirmative assertion as to the reason that Ladesich
Defendants were now approaching Plaintiffs with a counter offer. Plaintiffs
have alleged this representation of the reason to be false, as the “’new
information that has come to light’ actually meant that Macht, Coldwell and the
Ladesichs were considering a competing offer(s) in violation of the Lease
Agreement.” (Id. ¶ 59.)
Coldwell
and Macht’s demurrer is overruled as to the causes of action for Intentional
and Negligent Misrepresentation.
Fraudulent
Concealment
To
properly plead fraudulent concealment, Plaintiffs must allege: (1) the
defendant knowingly concealed or suppressed a material fact; (2) the defendant
was under a duty to disclose the fact to the plaintiff; (3) the defendant
intentionally concealed or suppressed the fact with the intent to defraud the
plaintiff; (4) the plaintiff was unaware of the fact and would not have acted
as they did if they had known of the concealed or suppressed fact; and (5) as a
result, the plaintiff sustained damage. (Boschma v. Home Loan Center, Inc.
(2011) 198 Cal.App.4th 230, 248)
Here,
Plaintiffs pled knowing suppression of a material fact: “Macht, Coldwell and
the Ladesichs intentionally omitted what exactly “new information that has come
to light” which Plaintiffs now know to mean that Macht, Coldwell and the
Ladesichs were considering a competing offer(s) in violation of the Lease
Agreement.” (SAC, ¶ 68.)
Plaintiffs
pled duty: “Macht and Coldwell had a fundamental duty to deal honestly and
fairly with all parties in the sale transaction, including Plaintiffs. See e.g.
Holmes v. Summer (2010) 188 Cal.App.4th 1510, 1523 (“. . . we observe
that ‘California cases recognize a fundamental duty on the part of a realtor to
deal honestly and fairly with all parties in the sale transaction.’”).” (SAC ¶
43.)
Plaintiffs
pled intentional concealment: “Plaintiffs are informed and believe, and based
thereon allege, that the concealment by Macht and the Ladesichs was done with
the intent to induce Plaintiffs to act in the manner herein alleged, including
purchasing the Property for an amount $150,000 higher than originally agreed
on.” (SAC ¶ 71.)
Plaintiffs
pled their unawareness: “Had Macht, Coldwell and the Ladesichs not concealed
the truth behind the price increase, Plaintiffs would demanded Macht, Coldwell
and the Ladesichs to perform on the original mutually acceptable terms or would
have filed a lis pendens if they refused. Instead, Plaintiffs were deceived
into paying the fraudulent demand and were forced into filing this lawsuit.”
(SAC ¶ 72.)
Plaintiffs
pled resulting damage: the $150,00 difference in the agreed upon purchase price
within the April 19 communication and April 22 offer, and the subsequent
increased counter offer from Ladesich Defendants. (SAC ¶ 73.)
Coldwell
argues that Macht was under no obligation to inform Plaintiffs that Ladesich
Defendants were “confronted with multiple competing purchase offers.” (Motion,
page 10.) But Coldwell fails to consider that Plaintiffs’ allegations of
concealment are associated with Macht’s concealment of a fact that would have
been in violation of the Lease Addendum signed between Ladesich Defendants and
Plaintiffs. A concealment of an underlying fact that could rise to a breach of
contract is actionable. (Baker v. Beech Aircraft Corp. (1974) 39
Cal.App.3d 315, 323 [“The instant case is not so much a concealment of
a cause
of action
as concealment
of material facts which would have disclosed to [Plaintiffs] the nature and
extent of their right of action.”].)
Coldwell
and Macht’s demurrer is overruled as to the cause of action for Fraudulent
Concealment.
Breach of
Duties
Plaintiffs
claim that Coldwell breached a “fundamental duty to deal honestly and fairly
with all parties in the sale transaction, including Plaintiffs” and a duty to
disclose. (SAC ¶ 43.)
“Although the seller's
agent does not generally owe a fiduciary duty to the buyer, he or she
nonetheless owes the buyer the affirmative duties of care, honesty, good faith,
fair dealing and disclosure.” (Holmes v. Summer (2010) 188 Cal.App.4th
1510, 1528.) “Both the policy of preventing future harm and considerations of
moral blame compel the imposition of a duty on the part of a realtor never to
allow a desire to consummate a deal or collect a commission to take precedence
over his fundamental obligation of honesty, fairness and full disclosure toward
all parties. (Citation.)” (Id. at p. 1524.)
Regarding the duty to
disclose, “It is now settled in California that where the seller knows of facts
materially affecting the value or desirability of the property which are known
or accessible only to him and also knows that such facts are not known to, or
within the reach of the diligent attention and observation of the buyer, the
seller is under a duty to disclose them to the buyer.” (Lingsch
v. Savage (1963) 213 Cal.App.2d 729, 735.) “Where such agent or broker
possesses, along with the seller, the requisite knowledge according to the
foregoing decisions, whether he acquires it from, or independently of, his
principal, he is under the same duty of disclosure.” (Id. at p. 736.)
“It is not necessary that there be a contractual relationship between the agent
or broker and the buyer.” (Ibid.)
Plaintiffs
have sufficiently pled a breach of both duties duty: “Macht and Coldwell breached their fundamental
duty to deal honestly and fairly with Plaintiffs by: (1) considering and
entertaining a competing offer(s) without disclosing this information to
Plaintiffs; (2) demanding $150,000 more than the originally negotiated mutually
acceptable terms; and (3) by presenting such counter-offer to Plaintiffs
through their real estate professional, Silver, knowing that it demanded a
price greater than the amount that had been mutually agreed to by the Parties,
and that, under the Parties’ Lease Agreement, Plaintiffs required to abstain
from such bad faith conduct.” (SAC ¶ 45.)
The Court also notes that
Coldewell and Macht have not substantively addressed this cause of action in
the instant demurrer.
Coldwell
and Macht’s demurrer is overruled as to the cause of action for Breach of
Duties.
CONCLUSION
Based on the foregoing reasons, Coldwell
and Macht’s demurrer is overruled in its entirety. Coldewell and Macht are
ordered to file an answer to the SAC or other responsive pleading within 30
days’ notice of this order.
Moving
parties to give notice.