Judge: Yolanda Orozco, Case: 22STCV10067, Date: 2022-10-07 Tentative Ruling
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Case Number: 22STCV10067 Hearing Date: October 7, 2022 Dept: 31
DEMURRER
TO COMPLAINT IS SUSTAINED WITH LEAVE TO AMEND
Background
On March 23, 2022, Plaintiff Cathy Arkley filed a Complaint against 1978, LLC and David Bilfeld (collectively “Defendants”) and Does 1 to 10 for:
1) Violations of
Building Standards as outlined in Cal. Civ. Code § 896
2) Breach of
Contract
3) Breach of
Express and Implied Warranty
4) Fraud
5) Strict Liability
On May 25, 2022, Defendants filed a demurrer to Plaintiff’s Complaint.
Plaintiff filed opposing papers on September 26, 2022. Defendants
filed a reply on September 30, 2022.
meet and confer
Before filing a demurrer, the demurring party is required to meet and confer with the party who filed the pleading demurred, in person or telephonically, to determine 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. (CCP) § 430.41.)
Defense counsel asserts they met and conferred with
Plaintiff’s counsel by telephone on May 2, 2022, regarding the demurrer.
(Leavitt Decl. ¶ 2, Ex. 1). Further correspondence occurred on May 10, 2022. (Id.
¶ 3, Ex. 2.) No resolution was reached.
Legal StandarD
Where pleadings are defective, a party may raise the defect
by way of a demurrer.¿ (Coyne v. Krempels (1950) 36 Cal.2d 257,
262.) A demurrer tests the sufficiency of a pleading, and the grounds for a
demurrer must appear on the face of the pleading or from judicially noticeable
matters.¿ (Code Civ. Proc., § 430.30(a); Blank v. Kirwan (1985)
39 Cal.3d 311, 318.) In evaluating a demurrer, the court accepts the
complainant’s properly-pled facts as true, and ignores contentions, deductions,
and conclusory statements. (Daar v. Yellow Cab Co. (1976) 67
Cal.2d 695, 713; Serrano v. Priest (1971) 5 Cal.3d 584, 591.) Moreover,
the court does not consider whether a plaintiff will be able to prove the
allegations, or the possible difficulty in making such proof. (Fisher v. San
Pedro Peninsula Hospital (1989) 214 Cal.App.3d 590, 604.)
Judicial Notice & Evidentiary Objections
Defendants request Judicial Notice of the following:
1) Exhibit 1: U.S. Department of Commerce, National Oceanic & Atmospheric Administration, National Environmental Satellite, Data, and Information Service, Record of Climatological Observations, Station: LOS ANGELES 2.6 NW, CA US US1CALA0064.
2) Exhibit 1: U.S. Department of Commerce, National Oceanic & Atmospheric Administration, National Environmental Satellite, Data, and Information Service, Record of Climatological Observations, Station: LOS ANGELES 2.6 NW, CA US US1CALA0064.
3) Exhibit 3: Los Angeles County Assessor Portal – Parcel Detail for the real property located at 462 N. Croft Ave., Los Angeles, CA 90048.
Plaintiff objects to Defendants’ request for Judicial Notice on the bases that the material has no probative value. (Evid. Code § 352.)
Without confirmation that Defendants have attached true and correct copies, the Court cannot confirm that the documents are what Defendant purports them to be. Moreover, in ruling on this Demurrer, the Court may not rely on the exhibits because they are not relevant to the disposition of this matter. (See Moran v. Endres (2006) 135 Cal.App.4th 952, 954 at fn. 2.)
Defendant’s request for Judicial
Notice is DENIED and Plaintiff’s evidentiary objections are SUSTAINED.
Discussion
The Defendants are the owner-builder of the subject property located in Los Angeles, California. (Compl. ¶ 1.) Plaintiff purchased the property from Defendants on or about June 29, 2018. (Compl. ¶¶ 1, 6.) Plaintiff asserts that the property when sold was defective and poses significant risks that were not apparent or discoverable when Plaintiff purchased the property. (Compl. ¶¶ 9, 11.) Plaintiff asserts that Defendants were put on notice of the defective conditions and faulty construction but Defendants failed to make repairs despite promising to do so and giving repeated assurances to Plaintiff after she purchased the property. (Comp. ¶¶ 11-13.)
The Complaint further alleges that Defendants acted fraudulently by making affirmative misrepresentations and concealment of facts including false statements that the property was consistent with building code requirements and free from defects. (Compl. ¶ 15.) This included texts from Mr. Bilfield that he would “take care of everything” on many occasions until 2019 when Plaintiff realized that no repairs would be made. (Compl. ¶ 15 (i).) Mr. Bilfield represented that discoloration on the roof was due to a chemical reaction and not his failure to waterproof the roof and build proper drainage. (Compl. ¶ 15 (ii).) Plaintiff relied on Mr. Bilfield’s representations that he would make the repairs well into 2019. (Id.)
Mr. Bilfield also advertised the home as being equipped with
smart home automation and even set up fake speakers and cameras that were not
wired or connected to create the impression the home was a “smart home.” (Id.
(iii).) Mr. Bilfield failed to disclose that to make the subject property into
a “smart home,” expensive upgrades would be needed; something Plaintiff did not
know when she signed the agreement. (Id.) Plaintiff also alleges that in
advertisements, Defendants represented that the subject property was 800 square
feet larger than it was. (Id. (iv).) In 2021, Plaintiff discovered the
true size of the property when attempting to sell and it lead to a reduction in
the sale price by $300,000.00. (Id.) Plaintiff asserts that she
relied on misrepresentations and concealed material facts about the subject
property when she purchased the subject property and had she known she would
not have purchased the property or would have taken swift action to undo the
transaction. (Compl. ¶ 53.)
Demurrer to 4th COA: Fraud
Defendants’ demurrer to Plaintiff’s 4th
cause of action for fraud.
“The elements of fraud, which give rise to the tort action for deceit, are (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.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) “In California, fraud must be pled specifically; general and conclusory allegations do not suffice.” (Id. at 645.)
Defendants assert that Plaintiff fails to plead a cause of action for fraud with sufficient specificity. Defendants assert Plaintiff’s cause of action for fraud is barred by the three-year statute of limitations. (See Code Civ. Proc., § 338(d).) Defendants assert that at the time of purchase, June 29, 2018, or soon thereafter, Plaintiff had either actual or was put on inquiry notice about the alleged concealments. (See Kline v. Turner (2001) 87 Cal.App.4th 1369, 1373 [“The statute of limitations begins to run when the plaintiff has information which would put a reasonable person on inquiry.”)
The California
Supreme Court explained in Fox v. Ethicon Endo-Surgery,
Inc. (2005):
“In order to rely
on the discovery rule for delayed
accrual of a cause of action, ‘[a] plaintiff whose complaint shows on
its face that his claim would be barred without the benefit of the discovery rule must
specifically plead facts to show (1) the time and manner of discovery and (2)
the inability to have made earlier discovery despite reasonable diligence.’ (Citation.) In
assessing the sufficiency of the allegations of delayed discovery, the court
places the burden on the plaintiff to ‘show diligence’; ‘conclusory allegations
will not withstand demurrer.’ (Citation.)”
(35 Cal.4th 797, 808 [italics original].)
From the allegation that Mr. Bilfeld represented that
discoloration on the roof was due to a chemical reaction rather than the failure
to waterproof the roof, Plaintiff can assert that discovery of the defect about
the roof was not discoverable due to Defendants’ misrepresentations. However,
Plaintiff’s cause of action for fraud fails because it fails to plead facts
with specificity. It is unclear when the alleged misrepresentation was made or
how it was made, or Plaintiff’s reliance.
As to the claim that Defendants misrepresented the subject property as being equipped with smart home automation, Plaintiff asserts knowledge that Mr. Belfield set up fake speakers and cameras that were not wired or connected but does not state when she learned this information or why it was not discovered earlier. Moreover, some defects in the subject property became apparent shortly after the purchase, but Plaintiff only alleges that Mr. Bilfeld represented that he would make repairs only as to the roof, not all other defects known to Plaintiff. Moreover, Plaintiff does not specify when, how, and by what means such assurances about repairs were made. Additionally, Plaintiff does not state how or why she was unable to discover the alleged misrepresentation and concealments earlier.
The demurrer to the fourth cause of action is SUSTAINED WITH LEAVE TO AMEND.
Conclusion
Defendants’ demurrer is SUSTAINED WITH 20 DAYS’ LEAVE TO AMEND as to Plaintiff’s fourth cause of action for fraud.
Moving party to give notice.